CORPORATE GOVERNANCE
General
The
business of the Company is managed under the direction of the Board of Directors. Pursuant to the requirements of the NYSE, a majority of the members of the Board must be independent, as defined by NYSE rules. The Board of Directors meets on a
regularly scheduled basis to review significant developments affecting the Company, to act on matters requiring approval by the Board, and to otherwise fulfill its responsibilities. The Board of Directors has adopted Corporate Governance Guidelines,
based on the recommendation of its Nominating and Corporate Governance Committee, to further its goal of providing effective governance of the Companys business for the long-term benefit of the Companys Shareholders, Employees, and
Customers. These guidelines set forth policies concerning overall governance practices for the Company, including the following:
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Qualifications of Directors
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Resignation Policy
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Independence of Directors
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Ethics
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Size of Board and Selection Process
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Director and Senior Management Compensation
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Board Leadership
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Share Ownership
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Board Meetings, Agendas, and Other Materials
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Access to Management
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Director Responsibilities
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Access to Independent Advisors
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Board Committees
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Director Orientation and Continuing Education
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Executive Sessions; Communications with
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Public Communications
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Non-Management Directors
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Other Practices
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Board Self-Evaluation
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The Companys Corporate Governance Guidelines, along with its Code of Ethics and the
Charters for its Audit, Compensation, Nominating and Corporate Governance, Safety and Compliance Oversight, and Executive Committees, are available on the Companys website,
www.southwestairlinesinvestorrelations.com/corporate-governance/board-committees. Shareholders may also obtain copies of these documents upon written request to Southwest Airlines Co., Investor Relations,
HDQ-6IR, P.O. Box 36611, Dallas, Texas 75235.
Board Membership and Qualifications
General Qualification Requirements; Diversity Considerations. The Companys Nominating and Corporate Governance Committee
is responsible for recommending to the Board the criteria for Board membership, as set forth in the Companys Corporate Governance Guidelines. The Corporate Governance Guidelines require that members of the Board (i) possess the highest
personal and professional ethics, integrity, and values; (ii) possess practical wisdom and mature judgment; (iii) be committed to the best long-term interests of the Companys Employees, Customers, and Shareholders; (iv) be
willing to devote sufficient time to fulfill their responsibilities; and (v) be willing to serve on the Board for an extended period of time. The Corporate Governance Guidelines also require the following factors to be considered in connection
with the nomination or appointment of new Board members: (i) finance, marketing, government, education, and other professional experience or knowledge relevant to the success of the Company in the current business environment;
(ii) independence (for non-management Directors); (iii) in the case of current Directors being considered for re-nomination, a Directors past attendance at
Board and committee meetings and participation in and contributions to such meetings; and (iv) diversity. Each individual is evaluated in the context of the Board as a whole, with the objective of recommending to Shareholders a group that
collectively can best serve the long-term interests of the Companys Employees, Customers, and Shareholders. The Board does not have a formal policy with regard to Board member diversity. Rather, diversity is one of many factors considered by
the Board in assessing the qualifications of Board candidates. Furthermore, in considering diversity, the Board takes into account various types of diversity, including, for example, diversity of experience, geography, gender, ethnicity, and color,
with the goals of obtaining diverse perspectives and encouraging constructive debate. The Boards primary consideration is to identify candidates with the background, experience, and skills that will best fulfill the Boards and the
Companys needs at the time a search is being conducted. Therefore, the Board does not believe it is appropriate to either nominate or exclude from nomination an individual based on gender, ethnicity, color, age, or similar factors. Currently
27 percent of the Board of Directors, 60 percent of the Compensation Committee, and 40 percent of the Nominating and Corporate Governance Committee, are ethnically and/or gender diverse.
The Corporate Governance Guidelines prohibit non-Employee Directors from serving on more than five
public company boards and prohibit Employee Directors from serving on more than two public company boards. The Corporate Governance Guidelines also require that the nature and time involved in a Directors service on other boards
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