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The Hershey Company
Corporate Governance Highlights

Governance Highlights

At The Hershey Company ("Hershey" or "Company") we set high ethical standards for the Company and our directors, officers and employees. Integrity was a key value of the Company when it was established by Milton Hershey more than a century ago, and it remains an essential part of our culture to this day.

We are committed to excellence in corporate governance, and are blessed with a top quality Board of Directors. Our Corporate Governance Guidelines ("Guidelines") are reviewed annually by the Board and were last amended as of December 10, 2013. These Guidelines, along with the committee charters, Code of Ethical Business Conduct and other governance materials are available on this website. Some highlights:


Independent Directors

  • The Guidelines provide that the Board must consist of a majority of independent directors. Hershey has adopted this provision even though not required to do so, and the independence of directors is determined by the Board with reference to criteria significantly more stringent than those employed by the New York Stock Exchange in its listing standards.
  • The Guidelines require the Board to evaluate the independence of directors at least annually. Each director is expected to review the independence criteria set forth in the Guidelines in conjunction with each Board meeting and to advise the Chair of the Governance Committee promptly if at any time there are developments that might affect his or her independence.
  • The Guidelines also require all members of the Audit Committee, the Compensation and Executive Organization Committee, the Finance and Risk Management Committee, and the Governance Committee to be independent. The Executive Committee is made up of the Chairman of the Board and the chairs of each of these independent committees and, if deemed appropriate by the Board, one additional member appointed by the Board.
  • Any transaction not in the ordinary course of business between the Company and our majority stockholder, the Milton Hershey School Trust, or entities related to the Milton Hershey School Trust, must be approved in advance by a special committee composed of directors elected by our Common Stock voting separately, or in the absence of such directors, the independent members of the Executive Committee, however, no director affiliated with the Milton Hershey School Trust may participate in the approval of such transactions. The Board also has authorized the independent directors having no affiliation with the Milton Hershey School Trust or its affiliates to designate another special reviewing committee to review these transactions.
  • The independent directors meet in executive session at the conclusion of each Board meeting. These sessions are chaired by the Chairman of the Board or, in the Chairman’s absence, a Vice Chairman of the Board, who meets the independence standards under the Guidelines. In the absence of an independent Chairman or Vice Chairman, then executive sessions are chaired by independent directors on a rotating basis. Executive sessions are also scheduled for each committee meeting.

Informed and Engaged Directors

  • Information relevant to agenda items is submitted to directors in advance.
  • Board members are expected to attend all meetings of the Board and their committees, as well as the Annual Meeting of Stockholders. Director participation is reviewed as part of the annual evaluation process.
  • The orientation program for new directors includes individual meetings with members of senior management, tours of key facilities, and review of materials relating to the Company’s business and corporate governance.
  • Directors are encouraged to attend ongoing education programs and are reimbursed for attendance at at least one program per year. At or before each Board meeting, directors are informed of significant business and/or legal developments affecting the Company and, if and as necessary, significant developments affecting the Board members’ obligations as directors. The members of each committee are advised of significant business and legal matters relevant to their committees at or before each committee meeting.
  • Performance of the Board, Board committees and individual directors is regularly reviewed, and corporate governance practices are evaluated at least annually.

Director Interests are Aligned with Stockholder Interests

  • Directors are elected annually - there is no classified Board.
  • One-sixth of the directors are elected by the holders of Common Stock voting separately as a class. The remaining five-sixths are elected by the holders of Common Stock and Class B Common Stock voting together.
  • Directors are subject to stock ownership requirements, as are officers.

The Board Exercises Strong Oversight

  • Board members review the Company's strategic plan annually, and are expected to participate in an active review.
  • The Guidelines require Board oversight of succession planning, and set forth procedures to be followed in the event of a sudden vacancy in the position of Chairman, President and/or CEO.
  • The Audit Committee has sole authority to approve audit engagement fees and terms for the independent auditors. The head of the internal audit department reports functionally to the Chair of the Audit Committee, and both the internal audit group and the independent auditors keep the Audit Committee advised of any issues relating to their audits as well as changes to relevant accounting rules. All members of the Audit Committee are financially literate and the Committee includes more than one audit committee financial expert. All audit and non-audit services to be provided by the independent auditors are subject to Audit Committee pre-approval.
  • Board members have full and free access to Company officers and employees, and have the authority to hire independent legal, financial or other advisors without consulting with or obtaining approval from management.

The Code of Ethical Business Conduct is Comprehensive and Communication is Encouraged

  • The Code of Ethical Business Conduct is available on the Internet, the Company intranet and in the form of a booklet. The Code is translated into eight languages.
  • All directors and employees must undergo training and annually certify their adherence to the Code.
  • The Company's Ethical Business Practices Committee provides guidance and oversees investigations.
  • The Company maintains a Concern Line, staffed by an independent third party, for receipt of reports by use of a toll-free telephone number or website. Reports may be received anonymously by these methods, or by mail. Contact information is printed in the Code, on the Company intranet and on posters displayed at Company facilities. The Board has approved the Company's Procedures For Submission & Handling of Complaints Regarding Compliance Matters. Stockholders also may contact the independent directors or the Audit Committee by mail, email, or the Concern Line’s toll-free telephone number or website.
  • Retaliation for good faith submission of a report is against Company policy. The Company encourages good faith reporting of concerns.