Opinion ID: 4511550
Heading Depth: 3
Heading Rank: 9

Heading: The Director of Internal Audit must have full

Text: and free access to the Audit Committee and vice versa.  (Formerly) No formal policy regarding the Director of Internal Audit’s access to the Audit Committee existed. 10. The Director of Internal Audit must report the audit findings to the Audit Committee, in- cluding which findings may relate to the eﬀec- tiveness and adequacy of the Company’s inter- nal controls, risk management and governance processes.  (Formerly) No formal policy about the Di- rector of Internal Audit’s reports to the Audit Committee existed. 11. The Director of Internal Audit must keep the Audit Committee informed of emerging trends in relevant internal control issues and internal audit matters and provide the Audit Committee with a report of outstanding audit issues and the current status of management’s eﬀorts to re- solve and improve the control environment.  (Formerly) No formal policy for the Director of Internal Audit’s reports to the Audit Commit- tee existed. 16 No. 19-2755 12. The Internal Audit Department must keep a log tracking analysis, proposals, and recom- mendations provided to other departments or management regarding internal controls and accounting and auditing procedures, including the time and place (if applicable) that such in- formation was provided, and any deadlines re- lated thereto.  (Formerly) None of these requirements ex- isted. 13. The Company must hold an annual meeting of stockholders within forty-five (45) days after the filing of its proxy statement.  (Formerly) The Company had not previ- ously committed to a timetable for holding its next annual meeting. 14. Revise the Company’s Bylaws and Corpo- rate Governance Guidelines to require that the Board maintain standing Audit, Compensation, and Nominating and Governance Committees.  (Formerly) The Bylaws did not require the Board to maintain any specific standing com- mittees, and the Corporate Governance Guide- lines only required that the Board maintain an Audit Committee. 15. The Company must publish on its website all Board committee charters, biographies of the Company’s Directors and Oﬃcers, and a chart No. 19-2755 17 or list identifying the members of each Board committee publicly available.  (Formerly) The Company published only two of the three Board Committee charters (with the Nominating and Governance Charter not currently published) on its website. It does not publish biographies of the directors or oﬃc- ers or a listing of the members of each Board Committee on its website. 16. The Company must adopt a formal claw- back policy covering specified incentive com- pensation of Oﬃcers.  (Formerly) No claw-back policy existed. 17. The Company must ensure that the contact information for its whistleblower hotline and website is conspicuously displayed and widely posted on its website, at the Company’s oﬃces and elsewhere, so as to be available to not only employees but also to customers, vendors, and other third parties.  (Formerly) There was no formal require- ment that the whistleblower hotline be posted on the Company’s website or that information be widely posted and displayed. These reforms strike us as substantive and meaningful: they mandate an increased frequency of activity, meetings, and reporting among the company’s audit committee, its audit team, outside auditors, and senior leadership. Further, they increase transparency regarding PSI’s board of directors, 18 No. 19-2755 create a claw-back policy, and enhance the visibility of its whistleblowing mechanisms. It was not an abuse of discretion to approve these measures.