Board Leadership Structure
The Company’s Corporate Governance Guidelines give the Board the flexibility to determine the best leadership structure for the Company based upon the Company’s evolving needs and opportunities. The Governance Committee periodically reviews the Board’s leadership structure and recommends changes to the Board as appropriate. Currently, Chad Faulkner, the Company’s founder, serves as Chairman of the Board. David Kirchheimer, serves as our Lead Independent Director and performs a role in many ways similar to an independent Chairman, including the following enumerated responsibilities:
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Serve, as necessary, as a liaison between the Chairman and the independent directors;
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Preside over Board meetings in the absence of the Chairman;
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Review, approve and help develop the agendas and scheduling for Board and committee meetings;
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Review and approve information and meeting materials sent to the Board;
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Preside over executive sessions, with the authority to call executive sessions; and
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Be available for consultation and communication with shareholders, as appropriate.
Our Board believes that there is no single, generally accepted approach to providing Board leadership and that given the dynamic and competitive environment in which we operate, the right Board leadership structure may vary as circumstances warrant. In that regard and following a year of tremendous change for the Company, which included a reduction in the Board’s size from 11 to eight directors in February 2023, Mr. Faulkner became our Chairman of the Board. Mr. Faulkner succeeded Mr. Masto, an independent director, who had served as our Chairman for most of 2022 and until Mr. Faulkner’s appointment.
Although not independent, Mr. Faulkner founded the Company and possesses a keen understanding of the industry in which we operate and the drivers of our growth. We believe Mr. Faulkner’s experience in the consumer finance industry combined with his significant share ownership in the Company, which serves to align his interests with those of our shareholders, makes him an appropriate Board member to serve as our Chairman.
The Board believes that separating the roles of Chairman and Chief Executive Officer and having a Lead Independent Director represents an appropriate allocation of roles and responsibilities at this time given the benefits of Mr. Faulkner’s experience and tenure (as a founder, former executive, director and significant shareholder) with the Company. Mr. Clark is well-positioned as the leader to develop and execute the Company’s corporate strategy and is free to focus on day-to-day challenges and opportunities. Given the depth of his experience and his leadership skills, Mr. Kirchheimer is well suited to serve as our Lead Independent Director.
Director Independence
The Board annually assesses the independence of all directors. No director qualifies as “independent” unless the Board affirmatively determines that the director is independent under the listing standards of NYSE. Our Corporate Governance Guidelines require that a majority of our directors be independent.
Under NYSE listing standards, our Board has determined that five of our eight directors are independent. Only Messrs. Clark, Faulkner and McKnight are not independent. Each of the members of the Company’s Audit Committee, Compensation Committee and Governance Committee are comprised entirely of independent directors. The independent directors generally meet in executive session at each regularly scheduled meeting.
Board Committees, Meetings and Meeting Attendance
The Board currently has four standing committees: Audit, Compensation, Governance and Risk. During 2022, the Company also had a Strategy and Corporate Development Committee (the “Strategy Committee”), which the Board disbanded effective January 1, 2023.
Each committee meets periodically throughout the year and reports its recommendations to the Board. The Company expects directors to attend every meeting of the Board and the committees on which they serve