BGC Corporate Governance Guidelines
BGC PARTNERS, INC.
CORPORATE GOVERNANCE GUIDELINES
June 7, 2021
The business of BGC Partners, Inc. (the “Company”) is managed under the direction of its Board of Directors (the
“Board”) pursuant to the Delaware General Corporation Law and the Company's Amended and Restated Bylaws. The
Board has responsibility for establishing broad corporate policies and for overseeing the overall performance of
the Company, the committees of the Board and management. The Board selects the senior management team that is
responsible for the day-to-day operations of the Company and for keeping the Board advised of the Company's
business. The Board acts as an advisor and counselor to senior management and ultimately monitors its
performance.
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Composition and Structure of the Board
- Size of the Board. The Board currently considers the optimum size of the Board to be between
four and six members. This range permits diversity of perspectives and experience without hindering
effective discussion.
- Board Membership Criteria. The Board is responsible for reviewing on an annual basis, the
appropriate criteria for membership on the Board. Generally, directors must (1) have the highest character
and integrity, (2) be free of any conflict of interest which would violate applicable laws or regulations or
interfere with the proper performance of the responsibilities of a director, (3) possess experience which
would be of particular importance in the performance of the duties of a director, (4) have sufficient time
available to devote to the Company’s affairs in order to carry out the responsibilities of a director, and
(5) have the capacity and desire to represent the best interests of the Company’s stockholders. The Board
generally values the broad business experience and independent business judgment in the financial services
or in other fields of each member. In addition, the Board considers as one factor among many the diversity
of Board candidates, which may include diversity of gender, age, ethnicity and other attributes. The Board
also considers diversity of skills and experience, as well as geographic background.
- Selection of Directors. The Board is responsible for evaluating candidates and recommending
them for election by the stockholders. The invitation to join the Board shall be extended by the Chairman,
on behalf of the entire Board.
- Directors Who Do Not Receive a Majority Vote. If a director fails to receive a majority of
votes cast in an uncontested election for which the number of candidates does not exceed the number of
directors to be elected, the Board shall require and such director will agree to tender his or her
resignation and take such other action with respect to such director as the Board deems advisable.
- Independent Directors. The Board’s policy is that a substantial majority of its members
qualify as independent directors as defined in the listing standards of the Nasdaq Stock Market, Inc.
(“Nasdaq”). Only independent directors may serve on the Audit Committee, Compensation Committee and other
committees of independent directors.
The Board shall make a subjective determination with respect to each
independent director that no relationships exist which, in the opinion of the Board, would interfere with
the exercise of independent judgment by each such director in carrying out the responsibilities of a
director. In making these determinations, the Board shall review and discuss information with regard to each
director’s business and personal activities as they may relate to the Company, including participation on
any boards of other organizations in which other members of the Board are members.
In addition, members
of certain Board committees, such as the Audit Committee and the Compensation Committee, are subject to
heightened standards of independence under various rules and regulations.
- No Personal Loans. The Company will not make any personal loans or extensions of credit, or
arrange to do the same, to directors that would be prohibited by Section 402 of the Sarbanes-Oxley Act of
2002.
- Chairman of the Board. The Board of Directors shall annually elect the Chairman of the
Board, which, if applicable, shall be the nominee of the shareholders who control a majority of the vote.
The Chairman shall preside at all meetings of stockholders and shall chair all meetings of the Board of
Directors. In addition, the Chairman shall perform all duties as may be required by law, and such other
duties as specified by the Board.
- Directors Who Change Their Present Job Responsibility. When a director’s principal
occupation or business association changes substantially from the position he or she held when originally
invited to join the Board, the director shall inform the Board. The Board will take into account, among
other things, such director’s new occupational status in evaluating whether to recommend that such director
be re-nominated for election as a director at the next Annual Meeting of Stockholders.
- Limits on Other Directorships. It is the expectation of the
Board that every member have sufficient time to commit to preparation for and attendance at Board and
committee meetings. Unless the Board determines that the carrying out of a director's responsibilities to
the Company will not be adversely affected by the director's other directorships, independent directors
should not serve on more than three (3) other boards of public companies in addition to the Board, and the
Chief Executive Officer should not serve on more than two (2) other boards of public companies, excluding
affiliates or entities which are or have previously been affiliated with or under common control with the
Company or any affiliates.
Independent directors shall advise the Chairman of the Board in advance of
accepting an invitation to serve on another board, including private company boards, non-profit boards,
boards of trustees, boards of overseers and advisory boards. The Board will take into account, among other
things, the nature of and the time involved in a director’s service on other boards in evaluating whether to
recommend that such director be re-nominated for election as a director at the next Annual Meeting of
Stockholders.
- Term Limits. The Board’s policy is not to establish term limits. While term limits could
help ensure that there are fresh ideas and viewpoints available to the Board, they hold the disadvantage of
losing the contribution of directors who have a unique insight into the business of the Company and its
operations. To ensure that the Board continues to generate new ideas and to operate effectively, the Board
shall monitor performance and take steps as necessary regarding continuing director tenure.
- Board Compensation. The full Board under the direction of the Chairman is responsible for
reviewing and establishing the compensation for independent directors on a periodic basis. In fulfilling
this responsibility, the Board shall be guided by the following factors, among others: compensation should
fairly pay directors for the responsibilities and duties undertaken in serving as a director of a company of
the size and complexity of the Company; and compensation should align directors’ interests with the
long-term interests of stockholders. Additionally, as one factor for consideration, the Board may
periodically obtain reports as to how the Company’s director compensation practices compare with those of
other large public and peer group corporations.
Duties and Responsibilities of Directors
- Duties of Directors. Directors are expected to fulfill their fiduciary duties by exercising
due care, becoming fully informed of the Company’s business and operations and matters pertaining thereto
and avoiding conflicts of interest, as described elsewhere in these Guidelines. Directors shall exercise
their business judgment to act in the best interests of the Company and its stockholders. In carrying out
this responsibility, the Board also considers the concerns of its other stakeholders and interested parties.
The directors rely on the honesty and integrity of the Company’s officers, employees, and the Board’s
outside advisors in making Board decisions. The directors are also responsible for acting as advisors to the
senior management team.
Directors are expected to regularly attend Board meetings and meetings of
committees on which they serve. In addition, directors are expected to attend the Annual Meeting of
Stockholders.
- Director Orientation and Continuing Director Education. The Company will make available
orientation opportunities for new directors. The Company may offer from time to time continuing education
programs for directors. The orientation programs may include meetings with senior management and may include
written materials that cover, among other things, a discussion of the Company’s strategic priorities, key
risks and opportunities, legal requirements and key policies and practices. In addition to any continuing
education programs offered to directors by the Company, the Board encourages its members to participate in
appropriate continuing education programs offered by third parties.
- Evaluating the Performance of the Board and Its Committees. The Board and its committees
shall annually engage in an assessment evaluating their performance for the purpose of increasing the
effectiveness of the Board and its committees. The Corporate Secretary is responsible for overseeing the
process for such annual evaluations.
- Compliance, Ethics and Conflicts of Interest. The Board and its committees are responsible
for oversight of the processes designed by senior management regarding compliance. Each director shall
comply with the Company’s policies and procedures, including, without limitation, the Company’s Code of
Business Conduct and Ethics (the “Code of Conduct”), and Hedging Policy.
Directors are expected to deal
at arm’s length with the Company and avoid any action, position or interest that conflicts with an interest
of the Company, consistent with the specific provisions of the Code of Conduct and other applicable
policies. If any actual or potential conflict of interest arises for a director, the director shall promptly
inform the Board. All directors will recuse themselves from any decision affecting their personal, business
or professional interests.
Any waiver of the Code of Conduct with respect to directors and executive
officers may be made only by the Audit Committee and/or where appropriate, the Board in accordance with the
provisions of the Code of Conduct and must be promptly disclosed to stockholders in accordance with
applicable law if required.
- Director Interaction with Institutional Investors, the Press, Customers, and Suppliers. The
Board believes that management speaks for the Company. Individual directors are not authorized to be a
spokesperson for the Company and, particularly when market sensitive information is involved, should avoid
responding to inquiries. A director should refer investors, market professionals, and the media to the Chief
Executive Officer, General Counsel or Corporate Secretary, Head of Investor Relations or other individual
designated by the Company. If comments from the Board are appropriate, they should come from the Chairman.
Board Meeting Procedures
- Selection of Agenda Items for Board Meetings. The Chairman of the Board will generally meet
with the Corporate Secretary prior to each Board meeting to establish the agenda items for each Board
meeting, and the Chairman of the Board may include such other Board members or officers in this meeting as
he or she deems appropriate. The Chairman of the Board will approve meeting schedules to assure that there
is sufficient time for discussion of all agenda items. Directors are encouraged to ask questions and
communicate concerns at any time.
- Board Materials Distributed in Advance. Information, data and presentation materials that
are important to the Board’s understanding of the business will be distributed in writing to the Board
before the Board meets. The Board acknowledges that, under certain circumstances, written materials may be
unavailable to directors in advance of a meeting, and that certain items to be discussed at the Board
meetings are of an extremely sensitive nature such that the distribution of materials on these matters prior
to the Board meeting may not be appropriate. Materials are generally distributed through a Board portal and
log-on credentials will be provided to the directors by the Corporate Secretary. Directors are expected to
review such meeting materials prior to Board and committee meetings.
- Executive Sessions of Independent Directors. The independent directors of the Board shall
meet in Executive Session without management present at least twice per year to discuss such topics as the
independent directors determine, including evaluation of the performance of the Chief Executive Officer. The
independent directors may determine a chair to preside over these sessions.
Board and Committee Access to Management and Outside Advisors
- Attendance of Non-Directors at Board Meetings. The Board welcomes the attendance at Board
meetings of non-Board members who are present for the purpose of making presentations, responding to
questions by the directors or providing counsel on specific matters within their area of expertise. The
Chairman may invite additional people as attendees on a regular basis, or periodic basis.
- Board Access to Management and Outside Advisors. The Board and the committees have access to
the Company’s management and the Board’s outside advisors. Board member contact with such individuals shall
be handled in a manner that would not be disruptive to the business operation of the Company. Any such
contact that is in writing should be copied to the Chairman. Management of the Company will cooperate with
any such engagement and will coordinate engagement of such advisors to ensure reasonable
rates.
Furthermore, the Board encourages management to bring executives into Board meetings who: (a) can
provide additional insight into the items being discussed because of personal involvement in these areas,
and/or (b) are executives with future potential that senior management believes should be given exposure to
the Board.
Committee Matters
- Number, Structure and Independence of Committees. It is the Board’s philosophy that matters
of significance should be considered and, where appropriate, acted on by the full Board. The Board’s
committees should function to perform the duties reserved to them by statute, regulation or charter, and to
identify and focus issues for discussion by the full Board. The Board currently has three standing
committees: the Audit Committee, the Compensation Committee and the Environmental, Social and Governance
Committee (“ESG Committee”). The Board may also form Special Committees from time to time for specific
matters. From time to time, the Board may form a new committee or disband a current committee depending upon
the circumstances.
- Each of the Audit Committee, the Compensation Committee and the ESG Committee shall be comprised solely of
independent directors, as that term is defined in the listing standards of Nasdaq. Each of these committees
shall adopt a charter outlining the responsibilities of such committee.
- Assignment of Committee Members. The Board is responsible for the assignment of Board
members to various committees, including evaluating and selecting Board committee chairpersons, which shall
be approved by the Chairman of the Board. Committee assignments may be considered for rotation periodically,
but there may be reasons to maintain an individual director’s membership on a particular committee for a
longer period.
- Committee Chairs. The committee chair shall preside in all meetings of the committee and
perform all duties as specified in the committee’s charter. If for any reason the committee chair is unable
to attend a committee meeting, the committee member present with the longest tenure on the committee or such
other committee member selected by the committee members shall preside.
- Frequency and Length of Committee Meetings. The committee chair, with the Chairman of the
Board, and in consultation with committee members, will determine the frequency and length of the meetings
of the committee. The committee chair will report the highlights of their meetings to the full Board
following each meeting, as necessary.
- Committee Agendas. The committee chair, with the Chairman of the Board, and in consultation
with the appropriate members of the committee and management, will develop the committee’s agenda.
Executive Officer Leadership Development
- Annual Evaluation of the Chief Executive Officer. The Compensation Committee shall perform
an annual evaluation of the Chief Executive Officer. The evaluation should be based on objective criteria,
which may include performance of the business, accomplishment of long-term strategic objectives and
development of management succession. The evaluation will be used by the Compensation Committee in the
course of its deliberations when considering the compensation of the Chief Executive Officer and shall be
shared with the full Board as appropriate.
- Approving CEO Compensation. The Compensation Committee is responsible for evaluating
annually the Chief Executive Officer’s performance against the approved performance goals and objectives.
The Compensation Committee shall consider such information received from the Chief Executive Officer as it
deems necessary or appropriate for its determination of the Chief Executive Officer’s compensation. The
Chief Executive Officer shall not be present during deliberations relating to his or her compensation. The
Compensation Committee shall approve the Chief Executive Officer’s compensation based on this evaluation.
- Succession Planning and Management Development. The Chief Executive Officer shall
periodically discuss with the Board the Company’s succession planning, which shall include recommendations
or evaluations of potential senior managers having significant responsibility for business areas or as
potential successors to the Company’s executives as well as the identification of any management development
plans that the Chief Executive Officer recommends for such individuals.
Stockholder Engagement
- Annual Say-on-Pay Vote. The Board shall solicit the views of the Company’s stockholders on
the Company’s executive compensation program and philosophy by conducting a stockholder advisory vote on
executive compensation (say-on-pay) on an annual basis. The Board and Compensation Committee shall consider
the results of each say-on-pay vote in reviewing and maintaining the Company’s executive compensation
program and philosophy.
- Ratification of Independent Registered Public Accounting Firm. The Board and the Audit
Committee shall solicit the views of the Company’s stockholders on the appointment of its independent
registered public accounting firm by conducting an annual vote to ratify the appointment thereof.
- Environmental, Social and Governance. The ESG Committee, in conjunction with the Board and
management, shall oversee engagement by the executive officers with the stockholders regarding the Company’s
environmental, social and governance policies and practices.
Periodic Review
- The Board is responsible for annually reviewing and considering any changes to these principles, as well as
considering other corporate governance principles that may, from time to time, merit consideration by the
Board.