Our Response to the Shareholder Proposal The Board of Directors unanimously recommends a vote “AGAINST” this shareholder proposal. The Board believes that it is the best interests of Textron and its shareholders for the Board to retain flexibility to determine the most appropriate leadership structure and person to serve as Chairman of the Board at any given time and that our current leadership structure and robust governance practices are effective in ensuring independent oversight of the Company. Under our Corporate Governance Guidelines and Policies (the “Guidelines”), the Board does not have a fixed policy on whether the roles of Chairman of the Board and CEO should be separate or combined and may, at its discretion, change its current approach. The Guidelines provide that, at least once every two years, the Board reviews whether having the positions of CEO and Chairman combined best serves the interests of Textron and its shareholders. The Board diligently undertakes this regular review and continues to conclude that combining the positions of CEO and Chair is the most effective leadership structure for Textron’s Board and best serves the interest of the Company and its shareholders. As outlined under “The Board of Directors—Leadership Structure” above, the Board has determined that the CEO with his extensive knowledge of the Company’s businesses and fulltime focus on the business affairs of the Company, makes a more effective Chairman than an independent director, especially in a multi-industry Company such as Textron. The Board believes that Mr. Donnelly serving as both Chairman and CEO provides clear leadership and accountability throughout the organization and best ensures alignment between the Board and management. The Board is confident that the Company’s corporate governance structure, with its strong emphasis on Board independence, ensures effective oversight of the company’s management by independent directors regardless of whether the chairman is independent. All of Textron’s directors other than the CEO are independent under the listing standards of the New York Stock Exchange and the criteria set forth in the Guidelines. In addition, each of the Audit, Nominating and Corporate Governance, and Organization and Compensation Committees is comprised solely of independent directors. The independent members of the Board meet in executive session without management present at each regularly scheduled Board meeting. The independent members of the Board also directly oversee the CEO’s performance, providing performance feedback and direction, formally evaluating him annually, as required by the Guidelines, and determining his compensation. In addition, Textron’s independent directors designate, from among them, a director to serve as Lead Director. The process for selecting the Lead Director is led by the chair of the Nominating and Corporate Governance committee and involves consideration of the skills and attributes which are desired for the role, such as the candidates’ leadership and communication skills, the length and quality of their service on Textron’s board and knowledge of Textron as well as other relevant experience. The Lead Director generally serves for a three year term and is assigned defined and expansive duties as set forth in the Guidelines and our Amended and Restated By-laws (“By-laws”), including (i) presiding at all meetings of the Board at which the Chairman is not present, including all executive sessions of the independent members of the Board, (ii) serving, when needed, as liaison between the CEO and the independent directors, (iii) identifying, together with the CEO, key strategic direction and operational issues upon which the Board’s annual core agenda is based, (iv) discussing agenda items and time allocated for agenda items with the CEO prior to each Board meeting, (v) determining the type of information to be provided to the directors for each scheduled Board meeting, (vi) convening additional executive sessions of the Board, (vii) determining to meet with Textron shareholders, as appropriate, after consultation with the CEO and General Counsel, and (viii) such other functions as the Board may direct. The Nominating and Corporate Governance Committee evaluates the Lead Director, reassessing on an annual basis the continuing effectiveness of the role of Lead Director and continues to conclude that the role serves Textron well. The proponent suggests, without explanation, that the long tenure of our current Lead Director, Mr. Clark, leads to diminished independence. Similarly, without any support, the proponent asserts that Mr. Clark’s prior experience serving as both CEO and Chairman “could lead to his giving the utmost deference to” or having “a special affinity with” the Company’s Chairman and CEO. As described above, the independent directors choose the Lead Director in a thoughtful and thorough process which values the extensive knowledge of Textron and its multiple businesses that a longer tenure provides. Moreover, Mr. Clark is independent under applicable SEC and NYSE Requirements and the Guidelines and his tenure and experience, including his breadth of expertise in corporate governance, talent development, change management, marketing and business development, as well as his service on multiple other public company boards throughout much of his career, provides substantial value to both the Board and the Company. Contrary to the theory of the proponent, his tenure and experience give him a broad perspective on the role of a board leader and make him even more cognizant of his duties and the value of director independence as both a member of the Board of Directors and as Lead Director. TEXTRON 2024 PROXY STATEMENT 69
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