Committees

Audit Committee

Purpose

The Audit Committee will assist the Board of Directors in fulfilling its oversight of: 

  1. the integrity of the Company’s financial statements,
  2. the effectiveness of the Company’s internal control over financial reporting,
  3. the Company’s compliance with legal and regulatory requirements,
  4. the independent auditor’s qualifications and independence, and
  5. the performance of the Company’s internal audit function and independent auditors.

The Committee will prepare the report that Securities and Exchange Commission (“SEC”) rules require be included in the Company’s annual proxy statement. 

The Committee also will carry out its duties and responsibilities to retain and terminate the Company’s independent auditors and to conduct an annual performance evaluation of the Audit Committee.

While the Audit Committee has the oversight responsibilities and powers set forth in this charter, the Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements.  This is the responsibility of management and the Company’s independent auditor.

Organization

The Committee will be organized consistent with the following significant parameters:

Size of the Committee:  The Committee will have no less than three members.

Qualifications:  Committee members must be non-employee Directors who meet the independence and experience requirements of the SEC, the New York Stock Exchange (the “NYSE”), and any other applicable requirements that the Board deems appropriate.  No Director may serve as a member of the Committee if such Director serves on the Audit Committee of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of such Director to effectively serve on the Committee. At least one member of the Committee shall be an individual who qualifies as an “Audit Committee financial expert,” as defined by applicable SEC rules.

Appointment of Members and Chairperson:  Each Committee member and the Committee

Chairperson will be recommended by the Corporate Governance Committee and shall be elected by vote of the Board of Directors to serve a term of one year.  Committee members and the Committee Chairperson may serve successive one-year terms without limitation.   

Meetings

The Committee shall meet not less than four times annually.  Additional meetings may be held, or actions may be taken by unanimous written consent, as deemed necessary or appropriate by the Committee Chairperson or any other member of the Committee.  

A majority of the members of the Committee present in person or by means of a conference telephone call or other permitted communications equipment shall constitute a quorum.  

Oversight

The Committee or its assigned member(s) shall: 

Internal Controls and Disclosure Controls:

  1. Review the appointment, performance, and replacement of the Internal Audit Director.
  2. Review and approve the internal audit plan and periodically review progress against the plan, significant audit issues and the status of management’s corrective actions.
  3. Review and discuss with management, the independent auditor and internal audit the adequacy and effectiveness of the Company’s internal controls, including any significant deficiencies and material weaknesses, and significant changes in internal controls.
  4. Review the Company’s disclosure controls and procedures for its filings with the SEC.

Financial Reporting:

  1. Review major issues regarding accounting principles and financial statement presentations, including any significant change in the Company’s selection or application of accounting principles.
  2. Review analyses prepared by management and/or the independent auditor setting forth the Company’s Critical Accounting Policies and estimates, and significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements. Review all other material written communications between the independent auditor and management, such as any management letter or any schedule of unadjusted differences. 
  3. Review the effect on the financial statements of regulatory and accounting initiatives and offbalance sheet structures.
  4. Review and discuss with management and the independent auditors the annual financial statements, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” prior to the filing or release of such financial statements, including confirmation that the Committee:
  • discussed with the independent auditors the matters requiring discussion under the applicable Auditing Standards for communications with the Audit Committee, and
  • received the written report from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Committee concerning independence.

Based on these reviews and discussions, recommend to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K filed with the SEC.

  1. Review and discuss with management and the independent auditors the quarterly financial statements, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
  2. Discuss with management the Company’s earnings press releases and financial information and earnings guidance provided through public disclosures under the NYSE requirements and applicable law.
  3. Prepare the Committee’s report for inclusion in the Company’s annual proxy statement.

Risk Management: 

  1. Review the Company’s strategies, processes, and controls with respect to risk assessment and risk management, including risks related to technology systems and cybersecurity, and assist the Board in its oversight of risk management.

Compliance with Laws, Regulations, and Company Policies:

  1. Review the Company’s compliance system (including, but not limited to, a code of ethics for senior financial Officers).
  2. Review procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal controls, or auditing matters, and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters.         

Relationship with Independent Auditor:

  1. Select and evaluate the independent auditor, approve all audit engagement terms and fees to be paid to such firm, and terminate such firm if circumstances warrant; the independent auditor shall be accountable to and report to the Committee.
  2. Evaluate the independent auditor’s qualifications, performance (including the performance of the lead partner), and independence on an ongoing basis, but no less frequently than once per year.
  3. Review and approve the scope of the external audit to be performed each fiscal year.
  4. Set policies and procedures for, and, as appropriate, approve the engagement of, the independent auditor for any non-audit service (to the extent such service is not prohibited) and the fee for such service, and consider whether the independent auditor’s performance of any non-audit services is compatible with its independence.
  5. Review with the independent auditor any audit problems or difficulties the independent auditor may have encountered in the course of the audit work and any management letter provided by the independent auditor, and management’s response (including any restrictions on the scope of the independent auditor’s activities or on access to requested information and any significant disagreements with management).
  6. Review all disagreements between the independent auditors and management regarding financial reporting.
  7. At least annually, obtain and review a report by the independent auditor describing:
  • the independent auditor’s internal quality-control procedures;
  • any material issues raised by the most recent internal quality-control review, or peer review, of the independent auditor’s firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with such issues; and
  • (to assess the auditor’s independence) all relationships between the independent auditor and the Company.
  1. Set clear hiring policies for employees or former employees of the independent auditor.           

Other Responsibilities

  1. Meet separately, periodically, with management, with compliance, internal audit, and the independent auditors in executive sessions.
  2. Review the Committee’s charter annually and recommend any changes to the Board of Directors for approval.
  3. Conduct an annual performance evaluation of the Committee.
  4. As appropriate, obtain advice and assistance from outside legal, accounting or other advisors. In this regard, the Committee will have authority to:
  • conduct or authorize investigations into any matters within its scope of responsibilities;
  • engage outside auditors for special audits, reviews, and other procedures;
  • retain special counsel and other experts and consultants to advise the Committee and meet with any representative of the Company; and
  • approve the fees and other retention terms for such parties.
  1. Report regularly to the full Board of Directors regarding the significant items of discussion at each Committee meeting.

Download a PDF of the Audit Committee Charter

Corporate Governance Committee

DONALDSON COMPANY, INC.
CORPORATE GOVERNANCE COMMITTEE CHARTER

Purpose

The primary purposes of the Corporate Governance Committee are:

  1. to identify and recommend individuals qualified to become members of the Board of Directors, consistent with criteria approved by the Board;
  2. to oversee the evaluation of the Board, its Committees, and management;
  3. to recommend Director nominees for the class of Directors that will stand for election at the Annual Meeting of Stockholders and to fill Director vacancies; and
  4. to develop and recommend to the Board a set of corporate governance guidelines applicable to the Company.

Organization

The Committee and its Chairperson will be appointed by the Board and will consist solely of

Directors who meet the independence requirements of the New York Stock Exchange (the “NYSE”).  Members of the Committee shall be elected by a vote of the Board to serve a term of one year.  Committee members and the Chairperson may serve successive one-year terms.  Members of the Committee are subject to removal at any time by a majority of the Board.

Oversight

The Committee, to the extent it deems necessary or appropriate, will:

  1. review and establish the process and criteria for the selection of Director candidates and Director qualification standards;
  2. identify individuals qualified to become members of the Board, consistent with such criteria and standards;
  3. review and establish the process for the consideration of Director candidates recommended by Stockholders;
  4. recommend to the Board a slate of nominees for election to the Board at the Annual Meeting of Stockholders and one or more nominees for each vacancy on the Board that occurs between Annual Meetings of Stockholders;
  5. make recommendations to the Board regarding the size and composition of the Board;
  6. recommend to the Board the Committee structure, qualified members of the Board for membership on Committees of the Board, and the selection of Committee Chairpersons;
  7. review and establish the process for Stockholders to communicate with the Board;
  8. review the Company’s corporate governance guidelines and recommend changes to the Board as appropriate;
  9. review the Company’s Code of Conduct annually and recommend changes to the Board as appropriate;
  10. review the Committee’s Charter annually and recommend any changes to the Board for approval;
  11. oversee the evaluation of the Board, its Committees, and management;
  12. conduct an annual performance evaluation of the Corporate Governance Committee; and
  13. provide regular reports of its activities to the Board.

Meetings

The Committee shall meet not less than two times annually, or more frequently as determined by the Board or the Committee.  Additional meetings may be held, or actions may be taken by unanimous written consent, as deemed necessary or appropriate by the Committee Chairperson or any other member of the Committee. 

A majority of the members of the Committee present in person or by means of a conference telephone call or other permitted communications equipment shall constitute a quorum.

Other Responsibilities

The Committee will have the resources and authority appropriate to discharge its responsibilities, including the authority to use internal personnel and to engage external search firms to identify Director candidates, and will have sole authority to retain and terminate any such search firm and to approve the fees and other retention terms related to the appointment of such firm.  The Committee will have the authority to obtain advice and assistance from internal or external legal, accounting or other advisors.

Download a PDF of the Corporate Governance Committee Charter

Human Resources Committee

DONALDSON COMPANY, INC.
HUMAN RESOURCES COMMITTEE CHARTER

Purpose

The Human Resources Committee (the “Committee”) will assist the Board of Directors (the "Board") in fulfilling its oversight duties relating to executive compensation.  The Committee also shall assist the Board with management development and succession planning. 

Organization

The Committee shall consist of three or more members.  The Committee members shall be

Directors who each meet the independence and qualification requirements of the Securities and Exchange Commission (the “SEC”), the New York Stock Exchange (the “NYSE”), applicable law and any additional requirements that the Board of Directors deems appropriate.  Each of the Committee members shall also qualify as a “non-employee” Director within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and as an “outside Director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.  All Committee members shall have, in the judgment of the Board, the experience, expertise and judgment necessary to make objective decisions on compensation, management development, and succession planning matters.

Each Committee member and the Committee Chairperson will be recommended by the

Corporate Governance Committee and shall be elected by vote of the Board of Directors to serve a term of one year.  Committee members and the Committee Chairperson may serve successive one-year terms without limitation and are subject to removal by the Board of Directors.

Meetings

The Committee shall meet not less than two times annually, or more frequently as determined by the Board or the Committee.  Additional meetings may be held, or actions may be taken by unanimous written consent, as deemed necessary or appropriate by the Committee Chairperson.  

A majority of the members of the Committee present in person or by means of a conference telephone call or other permitted communications equipment shall constitute a quorum.

Oversight

The Committee shall perform the following responsibilities and shall also perform such other duties and responsibilities delegated to the Committee by the Board:  

  1. Review and approve Corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives, and determine and approve the CEO’s compensation level based on this evaluation.
  2. Review and approve the Company’s compensation plans, including incentive plans for executive officers, and all equity-based plans (except for those duties that the Board may not delegate as a matter of law or regulation).
  3. Review and approve on an annual basis the compensation structure for the Company’s executive officers.
  4. Review and make recommendations to the Board regarding the Company’s leadership development and succession planning activities and process.
  5. Review and discuss with management the Company’s Compensation Discussion and Analysis (“CD&A”), and approve the Committee’s annual compensation committee report, and determine whether to recommend to the Board that the CD&A be included in the Company’s Proxy Statement.
  6. Approve stock awards under all equity compensation plans, except as such authority has been delegated by the Board or Committee to the Company’s CEO for employees who are not executive officers.
  7. Conduct an annual performance review of the Committee.
  8. Review and approve, or make recommendations to the Board regarding, the compensation and benefits programs for non-employee Directors.
  9. Review the Committee’s Charter annually and recommend any changes to the Board for approval.
  10. In the discretion of the Committee or at the request of the Board:
    • conduct regular reviews of the Company’s compensation arrangements and practices, including with respect to incentive compensation;
    • assess the extent to which such arrangements and practices encourage risk-taking behavior by participants and whether the level of such encouragement is appropriate under the circumstances; and
    • take or recommend to the Board any appropriate remedial actions.

Other Responsibilities and Powers

  1. The Committee shall report regularly to the full Board regarding the significant items of discussion at each Committee meeting.
  2. To assist the Committee in fulfilling its duties, management shall provide the Committee with information and recommendations as needed and requested. At its discretion, the Committee shall have access to the Company’s General Counsel and/or outside legal counsel and the Company’s Human Resources Department and/or outside compensation consultants, if it deems such access to be necessary or beneficial.  The Committee has the sole authority to retain and terminate any such consultants, including sole authority to approve the fees and other terms for such consultants.  Prior to selecting outside advisors, the Committee shall assess the independence of such advisors taking into account such factors as required by the New York Stock Exchange, the Securities and Exchange Commission, and applicable law and such other factors as the Committee determines are relevant.  All costs incurred by the Committee with respect to the use of outside counsel and consultants shall be paid by the Company.  
  3. The Committee shall have such other authority and responsibility as may be required under the rules of the SEC, the NYSE, or applicable law.

Download a PDF of the Human Resources Committee Charter


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Brad Pogalz 952-703-4965
Donaldson Company, Inc. Attn: Investor Relations P.O. Box 1299 Minneapolis, MN 55440-1299

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