© 2021 KOR Reporting, Inc.

Narrative Explaining Fitness 

Standards of the Board

2021-04-01
Narrative Explaining Fitness Standards of the Board 1 

Table of Contents:

History......................................................................................................................................... 2

1. Size of Board. ....................................................................................................................... 3

2. Board Membership Criteria................................................................................................... 3

3. Determination of Independent Directors............................................................................... 3
Narrative Explaining Fitness Standards of the Board 2 

History

Date Description of change Sections Updated

2021-04-01 Original Document All
Narrative Explaining Fitness Standards of the Board 3 

1. Size of Board

KOR Reporting’s Board consists of 3 directors, 2 of whom qualify as independent and 1 of 

whom is the Chief Executive Officer. 

2. Board Membership Criteria

As set forth in the organizational documents and governance policies of KOR Financial and 

KOR Reporting (together, “KOR”), the Board seeks Directors from diverse professional 

backgrounds who combine a broad spectrum of experience and expertise with a reputation 

for integrity. Directors should have integrity, objectivity, sound judgement and leadership; 

the relevant expertise and experience required to offer advice and guidance to the KOR 

Reporting senior management; the ability to make independent and analytical inquiries; and 

an understanding of KOR Reporting’s business, strategy and challenges; should be willing to 

devote adequate time and effort to Board responsibilities and to serve on Board committees 

at the request of the Board and is not a “Disqualified Person” as defined in the Governance 

Principles. Each Director is expected to ensure that his or her other commitments do not 

materially interfere with his or her service overall as a Director. 

3. Determination of Independent Directors

The Board shall review annually the relationships that each Director has with the KOR. 

Following such annual review, only those Directors who the Board affirmatively determines 

have no “material relationship” with KOR Reporting will be considered Independent Directors. 

Each Director shall notify the Board as soon as practicable of any event, situation or condition 

that may affect the Board’s evaluation of his or her independence of status as a public 

director. If warranted, following the receipt of such information, the Board shall determine 

whether such Director continues to be an Independent Director. 

For these purposes, a director shall not be deemed to have a “material relationship” with KOR 

Reporting and will be presumed to be “independent” if he or she meets each of the following:

a. The director does not (directly or indirectly as a partner, equity holder or officer of 

another company) provide consulting, legal or financial advisory services to the 

Company or the Company’s present or former auditors.

b. Neither the director nor any member of his or her immediate family is a significant 

equity holder in the Company. For purposes of this categorical standard, an equity 

holder shall be considered significant if the aggregate total is greater than three 

percent (3%) of KOR.

c. Neither the director nor any member of his or her immediate family serves as an 

executive officer of a civic or charitable organization that receives financial 

contributions from KOR. The Board shall also consider whether any charitable 
Narrative Explaining Fitness Standards of the Board 4 

donations made to a civic or charitable organization in which a director of member of 

his or her immediate family serves as a director, trustee or employed fundraiser 

impact the particular director’s independence; provided, however, donations less 

than $25,000 per year shall be presumed to be insignificant and, therefore, not impact 

such director’s independence.

Please refer to the KOR Reporting Board of Directors Governance Principles for more 

information.
Narrative Explaining Fitness Standards of the Board 5 

Appendix A: Exhibits

Regulator Exhibit Exhibit Description

CFTC B-1 Attach as Exhibit 8 to this application a narrative that sets forth 

the fitness standards for the board of directors and its 

composition including the number or percentage of public 

directors. 

SEC D-3 Attach as Exhibit D a copy of documents relating to the 

governance arrangements of the applicant, including, but not 

limited to, the nomination and selection process of the members 

on the applicant's board of directors, a person or group 

performing a function similar to a board of directors (collectively, 

“board”), or any committee that has the authority to act on behalf 

of the board; the responsibilities of the board and each such 

committee; the composition of the board and each such 

committee; and the applicant's policies and procedures 

reasonably designed to ensure that the applicant's senior 

management and each member of the board or such committee 

possess requisite skills and expertise to fulfill their responsibilities 

in the management and governance of the applicant, to have a 

clear understanding of their responsibilities, and to exercise 

sound judgment about the applicant's affairs.