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governance

Corporate Governance

• Board composition. Our board represents a diversity of expertise, professional experience, age, ethnicity and gender, and a range of tenures. A majority of our directors are independent. Directors’ expertise includes leadership, insurance operations, agency management, finance, education, marketing and technology. The board and Nominating & Governance Committee understand the importance of board refreshment and maintaining a balance between long-term board service and the new ideas, experience and expertise that can be gained by recruiting new directors.
• Executive compensation. The guiding principles of the executive compensation program include pay for performance, aligning executives’ interests with those of shareholders, driving long-term value creation, and ensuring a significant proportion of compensation is “at risk” based on the company’s performance. More than 70% of our CEO’s compensation, and more than 60% of compensation for the other named executive officers, is linked to performance- or equity-based incentives. Performance measures focus on absolute and relative shareholder return and are designed to incentivize operating growth and risk management.
• Other governance best practices include a stock ownership requirement for directors and top executives, limited executive benefits and perquisites, a clawback provision for both cash and equity awards, no company stock hedging or pledging, no single-trigger change in control benefits, no excise tax gross-ups from a change in control, and no poison pill.
• ESG focus, dialogue and oversight. Horace Mann launched its corporate social responsibility program in 2016, and continues to formalize it by encouraging internal and external dialogue on ESG topics and more clearly articulating its focus areas. In 2018, the company completed its initial stakeholder engagement of interviews, surveys and other research to identify areas of interest to various stakeholder groups. During 2018, Horace Mann discussed ESG topics with investors representing more than 32% of outstanding shares. And on an annual basis, the Enterprise Risk Management (ERM) Committee discusses ESG risk and the corporate social responsibility team briefs the board on ESG initiatives and developments. The full board reviews and approves the corporate social responsibility report.
• Risk management. Throughout the year, the board and its relevant committees receive regular reports from the ERM Committee and its chairman about the major risks and exposures facing Horace Mann, along with actions management has taken to monitor and control these risks and exposures. Throughout the year, the board and its relevant committees dedicate a portion of their meetings to review and discuss specific risks in greater detail. Given the growth and potential ramifications of cybersecurity risks, the chief information security officer regularly briefs the board and its relevant committees about cybersecurity risks, monitoring, detection and mitigation. The Audit Committee dedicates a portion of its meetings to review and discuss Horace Mann’s cybersecurity program.