Board Committees
April 2008The Board of Directors has the five standing committees described below:
The Audit Committee selects and retains a firm of independent public accountants to conduct audits of the accounts of Duke Energy and its subsidiaries. It also reviews with the independent public accountants the scope and results of their audits, as well as the accounting procedures, internal controls, and accounting and financial reporting policies and practices of Duke Energy and its subsidiaries, and makes reports and recommendations to the Board of Directors as it deems appropriate. The Audit Committee is responsible for approving all audit and permissible non-audit services provided to Duke Energy by its independent public accountants. Pursuant to this responsibility, the Audit Committee adopted the policy on Engaging External Auditor for Services, which provides that the Audit Committee will establish detailed services and related fee levels that may be provided by the independent public accountants and review such policy annually. See page 17 for additional information on the Audit Committee’s pre-approval policy.
The Board of Directors has determined that Dr. Rhodes and Ms. Schapiro are “audit committee financial experts” as such term is defined in Item 401(h) of Regulation S-K. See above for a description of their business experience.
This Committee met 12 times in 2007. During 2007, the Audit Committee members were Mr. Cox (Chair), Mr. Barnet, Mr. Bernhardt, Dr. Rhodes and Ms. Schapiro. Currently, the members are Mr. Cox (Chair), Mr. Bernhardt, Dr. Rhodes, Ms. Schapiro and Dr. Sharp. Each of these members has been determined to be “independent” within the meaning of Sections 303A.02, 303A.06 and 303A.07 of the NYSE’s listing standards and Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the company’s categorical standards for independence. In addition, each of these members meets the expertise requirements for audit committee membership under the NYSE’s rules and the rules and regulations of the Securities and Exchange Commission (“SEC”).
The Compensation Committee establishes and reviews the overall compensation philosophy, reviews and approves the salaries and other compensation of certain employees, including all executive officers of Duke Energy, reviews and approves compensatory agreements with executive officers, approves equity grants and reviews the effectiveness of, and approves changes to, the compensation program. This Committee also makes recommendations to the Board of Directors on compensation for outside directors. This Committee met 9 times in 2007. During 2007, the Compensation Committee members were Mr. Hance (Chair), Mr. Browning, Ms. Gray and Mr. Taft. Each of these members has been determined to be a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, “independent” within the meaning of Section 303A.02 of the NYSE’s listing standards and the company’s categorical standards for independence, and an “outside director” under the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). Currently, the members are Mr. Hance (Chair), Mr. Browning, Mr. DiMicco, Ms. Gray and Mr. Taft. All current members are considered to be “independent” under the NYSE rules, “outside directors” within the meaning of Section 162(m) and, other than Mr. DiMicco, “non employee directors” within the meaning of Rule 16b-3.
The Corporate Governance Committee considers matters related to corporate governance and formulates and periodically revises governance principles. It recommends the size and composition of the Board of Directors and its committees and recommends potential successors to the Chief Executive Officer. This committee also recommends to the Board of Directors the slate of nominees, including any nominees recommended by shareholders, for director for each year’s annual meeting and, when vacancies occur, names of individuals who would make suitable directors of Duke Energy. This committee may engage an external search firm or third party to identify or evaluate or to assist in identifying or evaluating a potential nominee. The Committee also performs an annual evaluation of the performance of the Chief Executive Officer with input from the full Board of Directors.
This Committee met 7 times in 2007. During 2007, the Corporate Governance Committee members were Ms. Gray (Chair), Mr. Browning and Ms. Schaprio. Currently, the members are Ms. Gray (Chair), Mr. Browning, Mr. DiMicco and Ms. Schapiro. Each of these members has been determined to “independent” within the meaning of Section 303A.02 of the NYSE’s listing standards and the company’s categorical standards for independence.
The Finance and Risk Management Committee reviews Duke Energy’s financial and fiscal affairs and makes recommendations to the Board of Directors regarding dividends, financing and fiscal policies. It reviews the financial exposure of Duke Energy, as well as mitigating strategies, reviews Duke Energy’s risk exposure as related to overall company portfolio and impact on earnings and reviews the financial impacts of major transactions as related to mergers, acquisitions, reorganizations and divestitures. This Committee met 7 times in 2007. During 2007, the Finance and Risk Management Committee members were Mr. Barnet (Chair), Mr. Browning, Ms. Gray and Mr. Hance. Currently, the members are Mr. Barnet (Chair), Mr. Browning, Ms. Gray, Mr. Hance and Mr. Taft.
The Nuclear Oversight Committee provides oversight of the nuclear safety, operational and financial performance, and long-term plans and strategies of Duke Energy’s nuclear power program. The oversight role is one of review, observation and comment and in no way alters management authority, responsibility or accountability. This Committee met 4 times in 2007. During 2007, the Nuclear Oversight Committee members were Dr. Rhodes (Chair), Mr. Barnet, Mr. Bernhardt and Mr. Taft. Currently, the members are Dr. Rhodes (Chair), Mr. Barnet, Mr. Bernhardt and Dr. Sharp.
Each committee operates under a written charter adopted by the Board of Directors. The charters are posted on our website at www.duke-energy.com/investors/corporate governance.asp and are available in print to any shareholder upon request.
