Corporate Governance

Corporate Governance

The board of directors of Elastic N.V. sets high standards for the company's employees, officers and directors. Implicit in this philosophy is the importance of sound corporate governance. It is the duty of the board of directors to serve as a prudent fiduciary for shareholders and to oversee the management of the company's business. To fulfill its responsibilities and to discharge its duty, the board of directors follows the procedures and standards that are set forth in these guidelines. These guidelines are subject to modification from time to time as the board of directors deems appropriate in the best interests of the company or as required by applicable laws and regulations.

Governance Documents

Committee Charters

Board of Directors

Powers, Composition and Function

Role

It is the principal duty of the board of directors to exercise its powers in accordance with its fiduciary duties to the company and its stakeholders and in a manner it reasonably believes to be in the best interests of the company and its stakeholders. Under our articles of association and Dutch corporate law, the members of the board of directors are collectively responsible for the management, general and financial affairs and policy and strategy of our company. The board of director focuses on long-term value creation for the company and its affiliated enterprise, and takes into account the stakeholder interests that are relevant in this context. Under Dutch law, the corporate interest extends to the interests of all corporate stakeholders, such as shareholders, creditors, employees, customers and suppliers. It is also the board of director’s duty to oversee senior management in the competent and ethical operation of the company.

One-tier board

Our board of directors is a one-tier board consisting of one executive director and non-executive directors. Our executive director will be responsible for the day-to-day management of the company, developing and setting the company's objectives and strategy, overseeing the associated risk profile and addressing corporate social responsibility issues that are relevant to the company, to the extent these tasks are not delegated to a committee of the board of directors. The non-executive directors shall be responsible for the supervision of the performance of the executive director and the general affairs of the company, and shall assist the executive director by providing advice and direction. The board of directors has appointed its executive director as chief executive officer and chairman. One of the non-executive directors has been appointed as lead independent director and another non-executive director has been appointed as vice-chairman of the board of directors. Our chief executive officer or all directors acting jointly may represent our company with third parties.

Our directors will be appointed for a maximum term of three years and can thereafter be re-appointed. The members of our board of directors may be suspended or dismissed at any time by the general meeting of shareholders. A resolution to suspend or dismiss a director will have to be adopted by at least a two thirds majority of the votes cast, provided such majority represents more than half of our issued share capital, unless the proposal to suspend or dismiss a member of the board of directors is made by the board of directors itself, in which case the resolution shall be adopted by a simple majority of votes cast.

Conflicts of Interest

In case of an actual or potential conflict of interest, the director (other than the lead independent director) will immediately report all facts regarding the matter to the lead independent director or, in his/her absence, the vice-chairman of the board of directors. The lead independent director must immediately report any (potential) conflict of interest to the vice-chairman of the board of directors or, in his/her absence, the other directors.  

The non-executive directors decide by a simple majority whether a director has a conflict of interest, without that director being present. If a director has a personal interest in a matter before the board of directors, the director must excuse himself or herself from discussion, and abstain from voting, on the matter.

Functioning

The board of directors has adopted board rules and committee charters governing its performance, its decision making, its composition, the tasks and working procedure of the committees and other matters relating to the board of directors, the chief executive officer, the non-executive directors and the committees established by the board of directors. In accordance with our board regulations, resolutions of our board of directors will be adopted by a simple majority of votes cast in a meeting at which at least the majority of its members is present or represented. Each member of the board of directors has the right to cast one vote. In a tie vote, our chief executive officer and chairman has a casting vote. The above principles are laid down in Dutch law, the above mentioned board rules and in our articles of association. 

Board Committees

While retaining overall responsibility, our board of directors has assigned certain of its tasks to permanent committees. Members of the permanent committees will be appointed by the board of directors. The board of directors will also determine the tasks of each committee. The board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which having the responsibilities and composition described below and in the attached charters:

Audit Committee

Our audit committee consists of three non-executive directors, Messrs. Chadwick, Puttagunta and Volpi. Our board of directors has determined that two out of three members of our audit committee, including the chair of our audit committee, satisfy the requirements for independence under the rules of the New York Stock Exchange and the SEC. Mr. Chadwick is the chair of our audit committee and qualifies as an “audit committee financial expert” as defined in the SEC rules, and each member of our audit committee satisfies the financial sophistication requirements of the New York Stock Exchange.

Our audit committee assists the board of directors in supervising, monitoring and advising the board of directors on financial reporting, risk management, compliance with relevant legislation and regulations and our code of conduct. It oversees the quality, integrity and preparation of our financial statements, our financial reporting process, our system of internal business controls and risk management, our internal and external audit process and our internal and external auditor’s qualifications, independence and performance. Our audit committee also reviews our annual and interim financial statements and other public disclosures, prior to publication. At least once per year, the non-executive directors who are part of the audit committee report their findings to the plenary board of directors. Our audit committee also recommends to our general meeting of shareholders the appointment of external auditors to audit the Dutch statutory accounts and board report. The external auditor attends meetings of the audit committee. The findings of the external auditor, the audit approach and the risk analysis are also discussed at these meetings.

Compensation Committee

Our compensation committee consists of three non-executive directors, Messrs. Chadwick, Fenton and Volpi. Mr. Fenton is the chair of our compensation committee. Our board of directors has determined that each member of our compensation committee meets the requirements for independence under the rules of the New York Stock Exchange and the SEC and is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.

The compensation committee is responsible for recommending to the board of directors the compensation package for our executive directors, with due observance of the remuneration policy adopted by the general meeting of shareholders. It is responsible for reviewing and approving the compensation, including equity compensation of our executive officers and overseeing their performance.  It also reviews and makes recommendations to our board of directors with respect to our executive compensation policies, plans, implements and administers our incentive and equity-based compensation plans and oversees compliance with our employment and compensation-related disclosure obligations under applicable laws.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of three non-executive directors, Fenton, Puttagunta and Volpi. Mr. Volpi is the chair of our nominating and corporate governance committee. Our board of directors has determined that each member of our nominating and corporate committee meets the requirements for independence under the rules of the New York Stock Exchange. The nominating and corporate governance committee determines selection criteria and appointment procedures for members of our board of directors, periodically assesses the scope and composition of our board of directors and evaluates the performance of our directors. It also assists the board of directors in identifying individuals who are qualified to become members of the board of directors. Furthermore, it is responsible for overseeing compliance with legal and regulatory requirements applicable to us.

Ethics and Compliance

Elastic aims to be a responsible business partner, and to behave responsibly towards our customers and other business partners, our employees and in the communities where we operate. Elastic’s Code of Business Conduct and Ethics supports our vision, mission, and strategic objectives for building and sustaining a truly great distributed company, and being recognized as trustworthy by our various stakeholders, including community, users, customers, partners, employees and shareholders. The Elastic Code of Business Conduct and Ethics is based upon Elastic’s Source Code (https://www.elastic.co/about/our-source-code), and is supplemented by policies and practices that help ensure we all understand how to act in accordance with it and apply it in our day-to-day interactions. The Elastic Code of Business Conduct and Ethics is binding on all employees and applies to all our business activities, locations and ventures and should be used alongside other Elastic policies, guidance, work rules, contracts and instructions. We are all responsible for both complying with the Elastic Code of Business Conduct and Ethics and acting in the spirit of the Code. Whether it is within Elastic our outside Elastic, and regardless of position or tenure, all employees should strive to conduct themselves in accordance with high ethical standards.

Reporting Ethical Concerns

We encourage all employees to report in good faith any issues or concerns about potential ethical, legal, or regulatory violations, including improper, unethical or unlawful business practices such as fraud or bribery. Elastic investigates all concerns raised and resolves each consistent with the law and the Code of Business Conduct and Ethics.

If you have a good faith concern regarding conduct that you believe to be misconduct such as a violation of Elastic's policies, or you believe that any violation or fraudulent activity has occurred or is occurring, we encourage you to report any concern(s) to Elastic via email at ethics@elastic.co or any of the following:

  • discuss the situation with your manager; or
  • if your manager is involved in the situation or you are uncomfortable speaking with your manager, contact the General Counsel, Chief Financial Officer or Vice President of Human Resources; or
  • if the actual or suspected misconduct or irregularity pertains to the functioning of an executive board member of Elastic, employees can report concerns directly to the Lead Independent Director of Elastic.

If you don’t believe your concern is appropriately addressed, or if you are not comfortable speaking with one of the above-noted contacts, you may anonymously report your concern(s) via the Confidential Reporting Hotline or electronically using the form below, through which you may choose to identify yourself or remain anonymous. Concerns submitted through the reporting hotline or electronic form that are financial or accounting related will be reviewed by a member of the Audit Committee and the General Counsel (or their delegees, as appropriate).

Although you may submit your concern(s) anonymously, providing your name and contact information will enable us to contact you if we need additional information during the course of the investigation.