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 sustainable 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 two executive directors and seven non-executive directors. Our executive directors 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 directors and the general affairs of the company, and shall assist the executive directors by providing advice and direction. The board of directors has appointed one of its executive directors as chief executive officer and the other executive director as chief technology officer. One of the non-executive directors has been appointed as chairman and 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, without delay, report all facts regarding the matter to the lead independent director or, in his/her absence, the vice-chairperson of the board of directors. The lead independent director must, without delay, report any (potential) conflict of interest to the vice-chairperson of the board of directors or, in his/her absence, the other non-executive directors. The vice-chairperson must, without delay, report any conflict of interest or potential conflict of interest to the lead independent director or, in the lead independent director's absence, to the other non-executive 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. 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. Auvil and Puttagunta and Ms. Leibowitz. Our board of directors has determined that each member 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. Auvil 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 (including cybersecurity risks), compliance with relevant legislation and regulations, the application of information and communication technology 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, our internal and external auditor's qualifications, independence and performance and any significant tax or treasury matters. Our audit committee also reviews our annual and interim financial statements and other public disclosures, prior to publication, as well as reviews any related person transactions in accordance with our related person transactions policy. 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, Ms. Gleeson and Messrs. Auvil and Puttagunta. Ms. Gleeson 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 and non-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. Furthermore, the committee is responsible for reviewing and monitoring matters related to human capital management, including talent acquisition and retention.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee consists of three non-executive directors, Mr. Puttagunta and Mses. Marooney and Leibowitz. Mr. Puttagunta 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, including the composition and structure of each committee, and facilitates the evaluation of the performance of our directors, each committee and the executive officers. It also assists the board of directors in identifying, recruiting and recommending 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, as well as our environmental, social and governance activities, programs and public disclosures.
Ethics and Compliance
Each one of us at Elastic shares a commitment to integrity in all that we do. Winning and maintaining the trust of our global user community, customers, partners, and shareholders is important to us — and we achieve that by consistently demonstrating honesty, professionalism and empathy every day. Regardless of position, tenure, or geographic location, all Elasticians embrace the culture that always requires acting in accordance with the highest ethical standards, and complying with all applicable laws and regulations. Please see our policies and other documents available here for a more detailed picture of our approach to ethics and compliance.
Reporting Ethical Concerns
If you have observed potential violations or would like to ask questions, present ideas, or raise concerns pertaining to ethics or compliance at Elastic, you must promptly take one of the following steps:
- Discuss
the situation with your manager;
- If your manager is involved in the situation or you are uncomfortable speaking with your manager, send an email to ethics@elastic.co or contact the Chief Human Resources Officer, Chief Legal Officer, or Chief Financial Officer. You will find all of these individuals' contact information on our Wiki pages dedicated to ethics and compliance;
- If the actual or suspected misconduct or irregularity pertains to the functioning of an executive director of Elastic, report concerns directly to the Lead Independent Director of Elastic at the address of Elastic's registered office at Keizersgracht 281, 1016 ED Amsterdam, the Netherlands;
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Anyone (including employees, contingent workers, vendors, and all others) may also report ethical, legal, or regulatory concerns via the Ethics and Compliance Hotline by phone or via the web-reporting tool available at https://www.elastic.co/about/trust. You may choose to identify yourself or remain anonymous. We will acknowledge receipt of your report and route it to the appropriate professionals to comprehensively review and resolve the issue. For example, depending on the nature of a complaint, it may be addressed by Human Resources, the legal compliance team, or other seasoned professionals. Concerns received via the Ethics and Compliance Hotline that relate to Elastic's accounting, internal controls or auditing matters will be referred to the Chairperson of the Audit Committee and the Chief Legal Officer (or to persons appointed by them, as appropriate);
- In addition, if your complaint relates to accounting, internal controls or auditing matters, you may contact the Chairperson of our Audit Committee by sending an email to ethics@elastic.co or by writing to Elastic N.V., 88 Kearny St, Floor 19, San Francisco, California 94108, Attn: Chairperson of Audit Committee. We will forward all such communications to the Chairperson of our Audit Committee.
And remember, you have Elastic's unwavering commitment to protect all who have in good faith reported a complaint, or who assist in any related investigation, against any reprisal, threats, discrimination, harassment, retribution, or retaliation.
Finally, you always have a right to contact law enforcement or regulatory authorities, and nothing limits any Elastician from making a good faith report or complaint to the appropriate authorities.