At Quorum Health Corporation, we recognize that investor confidence in the governance of public companies is essential and must be earned every day. We have adopted and are committed to corporate governance guidelines and practices that protect our shareholders’ interests. Quorum Health Corporation is fortunate to have a very strong board of independent directors who are actively involved in the leadership and oversight of our business, with particular attention to our compliance with accounting, financial and regulatory standards. We have the highest confidence in our system of internal controls, practices, and policies and, above all, in the integrity of our employees.
In order to ensure the utmost transparency in our governance processes and to instill confidence in our investors, our Board of Directors is continuously monitoring best practices in corporate governance, including in areas such as director independence, director qualifications, the election of directors, committee duties and governance, committee composition and qualifications, our code of conduct, policies regarding stock trading and the reporting of stock trading, policies regarding reporting of complaints involving accounting matters and hiring practices with respect to the employees of a company’s independent auditors. Our Board of Directors has taken the following actions in furtherance of its goals and objectives:
- Adopted governance guidelines for the Board of Directors, including independence standards for our directors.
- Adopted the Board’s current leadership structure of an independent Chairman of the Board. Our Board is committed to strong, independent Board leadership and believes that objective oversight of management’s performance is a critical aspect of effective Board leadership.
- Determined that our Board of Directors is comprised of a majority of directors who meet the independence standards of our governance guidelines and the applicable rules of the New York Stock Exchange and the Securities and Exchange Commission (“SEC”). Our Board of Directors has determined that all of the current members of our Board of Directors except for Messrs. Hussey, Miller and Dr. Paul, who are employees or officers of the Company, are independent.
- Entire Board of Directors is elected annually to one year terms.
- Adopted a policy which limits the number of other public company boards on which each director may serve and a policy which requires a director to tender his or her resignation from the Board upon a significant change in circumstances, such as a change in his or her primary occupation or if, in an election in which the standard for election of directors is a majority vote in accordance with our bylaws, the director receives a greater number of “against” votes than “for” votes.
- Adopted procedures for independent directors to meet in executive session. The Board of Directors has authorized the chairperson of the appropriate board committee to preside over an executive session at which the principal item to be considered is within the scope of his or her committee. If there is no single principal issue, the Chairman of the Board, if independent, or the Lead Independent Director will preside at such executive session.
- Adopted a Code of Conduct that is applicable to all directors, officers, and employees of the organization.
- Adopted a risk oversight mechanism pursuant to which our management team is primarily responsible for risk management, which it administers through a broad-based committee that includes executives from our operations, internal audit, compliance, quality, revenue management, accounting, risk management, finance, human resources, information technology and legal departments, while our Board of Directors is responsible for the overall supervision of our Company’s risk oversight activities at both the full Board level and at the Board committee level. Our risk oversight requires our management team to provide regular updates throughout the year to the respective Board committees regarding the oversight of the risks each Board committee oversees, and further requires each of these committees to provide a report on such risks to our full Board at either regular meetings of the Board of Directors or at committee meetings in which all Board members participate. In addition to the reports from the committees, the Board receives presentations throughout the year from various department and business unit leaders that include discussions of risks as necessary. At each Board meeting, the CEO addresses matters of particular importance or concern, including any areas of risk that require Board attention. Additionally, through dedicated sessions focusing entirely on corporate strategy, the full Board reviews in detail the Company’s short- and long-term strategies, including consideration of risks facing the Company and their potential impact.
- Adopted the Audit and Compliance Committee Charter, which goes beyond the requirements of the Sarbanes-Oxley Act and regulations. Our Audit and Compliance Committee is comprised solely of independent directors, who also meet specific qualifications for service on this committee. Mr. Feinstein is the chair of the Audit and Compliance Committee and an “audit committee financial expert” as defined by the SEC.
- Empowered our Audit and Compliance Committee with oversight responsibility for financial reporting with respect to our major financial exposures and the steps our management team has taken to monitor and control such exposures as well as for the effectiveness of our management team’s enterprise risk management process that monitors key business risks facing our Company.
- Adopted a procedure for handling complaints regarding accounting matters.
- Adopted a Compensation Committee Charter and strengthened the duties of this committee. The Compensation Committee is comprised solely of independent directors, who also meet specific qualifications for service on this committee.
- Adopted a statement of policy regarding securities trading to ensure that all persons subject to the reporting requirements of Section 16 of the Exchange Act will be able to comply with all applicable filing requirements in a timely manner.
- Adopted a policy requiring our directors and officers, until they satisfy certain stock ownership guidelines, to hold for at least one year 100% of the shares received upon the exercise of stock options or the vesting of restricted stock units, net of shares required to pay the exercise price and any taxes.
- Adopted a policy, in accordance with the Sarbanes-Oxley Act, prohibiting us from making any loans to our directors or executive officers (no such loans were outstanding at the date the policy was adopted).
- Adopted a Governance and Nominating Committee Charter. The Governance and Nominating Committee is comprised solely of independent directors.
- Included in our governance guidelines for the Board of Directors a provision on the selection criteria for directors to specify certain factors our Governance and Nominating Committee considers in selecting and nominating individuals to serve on our Board. These factors include, without limitation: (a) our Board’s and our Company’s needs for input and oversight about the strategy, business, regulatory environment, and operations of our Company; (b) our management directors’ views as to areas in which additional advice and counsel could be provided by our Board; (c) the mix of perspectives, experience, and competencies currently represented on our Board (while this is primarily directed to the professional acumen of an individual, it may also include gender, ethnic, and cultural diversity); (d) the results of our Board’s annual self-assessment process; and (e) as to our incumbent directors, meeting attendance, participation and contribution, and each director’s current independence status.
- Adopted procedures for the annual review of governance guidelines, committee charters, and board and committee performance.
- Adopted procedures for all interested parties who wish to communicate directly with our non-employee directors and/or members of our Audit and Compliance Committee. Correspondence should be mailed to the director(s) at:
c/o Quorum Health Corporation.
1573 Mallory Lane, Suite 100
Brentwood, TN 37027
Attention: Hal McCard
email Hal McCard
In the alternative, interested parties may communicate with our directors by accessing the Confidential Disclosure Program set forth in our Code of Conduct.
- Adopted additional policies regarding spending authorizations, board education and evaluations.