Corporate governance principles

Corporate governance principles

Introduction

The following Corporate Governance Principles have been adopted by the Boards of Directors of Ohio National Holdings, Inc., Ohio National Financial Services, Inc. and The Ohio National Life Insurance Company, Inc. and shall also apply to their subsidiaries. (As used herein, unless otherwise indicated, the “Board” refers to the Boards of Directors of Ohio National Holdings, Inc., Ohio National Financial Services, Inc. and The Ohio National Life Insurance Company, collectively, and the “Company” also refers to all three companies, collectively.)

These Corporate Governance Principles reflect the Board’s commitment to its Governance responsibilities. These Corporate Governance Principles are not intended to change or interpret any Federal or state law or regulation, including the laws of Ohio or the Articles of Incorporation (“the Articles”) or the Code of Regulations (“the Regulations”) of the Company. These Corporate Governance Principles are subject to modification from time to time by the Board.

Board of Directors

The Board may from time to time change the size of the Board where, in the Board’s judgment, the Board would be able to function more effectively if its size were adjusted, provided that
1. the size of the Board must be consistent with any limitations prescribed in the Articles and/or the Regulations, as amended, and
2. no reduction in the size of the Board may occur where the effect would be to require the termination of any Board member, who is otherwise in good standing and eligible to serve, during his or her term.
The Board shall be comprised of a majority of directors who qualify as independent directors (“Independent Directors”). The Governance Committee shall review on an ongoing basis the relationships, other than as a Board member, that each director has with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). Following such review, only those directors whom the Governance Committee affirmatively determines have no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company) will be considered Independent Directors. The Governance Committee may adopt and disclose standards to assist it in determining director independence.
The Board and all officers of the Company shall adhere to the Conflict of Interest Policy adopted by the Board, as modified from time to time. A copy of the current Conflict of Interest Policy is attached hereto and incorporated herein. Any conflict of interest issues involving Board members shall be referred to and resolved by the Governance Committee.
The Board shall be responsible for nominating members for election to the Board and for filling vacancies on the Board that may occur between annual meetings of shareholders or members, as applicable. The Governance Committee is responsible for identifying, screening and recommending candidates to the Board for Board membership. When formulating its Board membership recommendations, the Governance Committee will consult with senior management and other directors, as it deems appropriate.
Nominees for director shall be selected on the basis of, among other things, their:
- business perspective and experience,
- business and general knowledge and skills,
- particular areas of needed expertise,
- integrity,
- diversity,
- ability to make independent analytical inquiries,
- understanding of the Company’s business environment
- willingness to devote adequate time and effort to Board responsibilities.
The Governance Committee shall be responsible for assessing the appropriate balance of criteria required of Board members.
All of the authority of the Company shall be exercised by, or under the direction of, the Board except where the law, the Articles, or the Regulations require action to be authorized or taken by the shareholders or the members, as applicable. In addition, the Board shall provide counsel and advice to assist senior management. A director shall perform his/her duties as a director, including his/her duties as a member of any committee of the directors upon which he or she may serve, in good faith, in a manner he or she reasonably believes to be in the best interests of the Company, and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In performing his or her duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data that are prepared or presented by:
1. one or more directors, officers, or employees of the Company who the director reasonably believes are reliable and competent in the matters prepared or presented;
2. counsel, public accountants, or other persons as to matters that the director reasonably believes are within the person’s professional or expert competence; and a committee of the directors upon which he or she does not serve, duly established in accordance with a provision of the Articles or the Regulations, as to matters within its designated authority, which committee the director reasonably believes to merit confidence.
Since the Company believes that there are benefits to be derived from having Board members who, through years of service, have a strong familiarity with the Company and its industry, there is no term limit for Board members. However, no director shall continue to serve beyond the annual meeting of members next following the person’s 70th birthday, unless the Board approves one or more additional one-year terms.
Directors who are also employees of the Company are required to resign from the Board at the same time they leave employment with the Company, provided that such ex-employee’s resignation from the Board may be rejected by the Board and/or he or she could be re-elected to the Board after such resignation. A Director who changes his or her principal employment, or experiences a significant change in professional responsibilities, from that which he or she first held when he or she became a member of the Board, or was last elected, must promptly notify the Governance Committee following such event and shall submit his or her resignation from the Board effective immediately. The Governance Committee shall review the relevant circumstances and desirability of the director’s remaining on the Board. The Committee shall accordingly make a recommendation to the Board as to whether to accept or reject such resignation. The Board, in turn, shall then act on the Governance Committee’s recommendation.
Board members are expected to limit their participation on the boards of other companies or organizations so as to assure that those other board memberships do not interfere with their ability to serve on the Company’s Board. Any existing Board member who intends to accept a position on another board during his or her tenure on the Company’s Board shall notify the Governance Committee of such proposed board membership so that the Governance Committee can evaluate whether such board membership would create a conflict of interest or unduly interfere with the Board member’s ability to serve on the Company’s Board. In the event that the Governance Committee determines that a conflict of interest exists or the other board position unduly interferes with the Board member’s ability to serve on the Company’s Board, the Board member will be given the option of:
1. declining the other board membership;
2. resigning from the Company’s Board; or asking the full Board to reconsider whether the new board position is inconsistent with his or her continuing service on the Board.
A director who is also an employee receiving compensation from the Company or an affiliate shall not receive additional compensation for such service as a director. The Company believes that compensation for non-employee directors should be attractive and competitive and should, where possible, allow non-employee directors to participate in the success of the Company through incentive-based compensation tied to the Company’s financial performance. The Governance Committee will periodically review the level and form of the Company’s director compensation, including how such compensation relates to the director compensation of companies of comparable size, industry and complexity, and importantly of companies with whom the Company competes. Any changes in director compensation shall be proposed to the full Board for consideration.
The Governance Committee will sponsor an annual self-assessment of the Board’s performance and effectiveness, as well as the performance and effectiveness of each committee of the Board, the results of which will be discussed with the full Board and each committee.
The Board believes that management speaks for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies involved with the Company. However, it is expected that Board members will do this only with the knowledge of management, or as required by law, and, absent unusual circumstances or as contemplated by the committee charters, only at the request of management.
Board members shall have access to the Company’s management and, as appropriate, to the Company’s outside advisors. Board members shall coordinate such access through the Chief Executive Officer and Board members will use judgment to assure that this access is not distracting to the business operation of the Company. Nothing herein shall limit the Board, or any committee thereof, from engaging outside advisors of its own where it reasonably believes it is necessary to do so or from investigating, without restriction, any alleged violation of the Company’s Conflict of Interest Policy or Code of Ethics.
The Company, with the guidance of the Governance Committee, shall provide new directors with a director orientation program to familiarize directors with, among other things, the Company’s business, strategic plans, significant financial, accounting and risk management issues, compliance programs, conflicts policies, code of ethics, corporate governance principles, principal officers, internal auditors and independent auditors. The Governance Committee will periodically assess the development needs of the Board and the effectiveness of any training or educational opportunities made available to the Board. The Governance Committee may request that the Company make available to directors the opportunity to participate in continuing educational programs in order to maintain the necessary level of expertise to perform their responsibilities as directors.

There shall be at least four regularly scheduled meetings of the Board each year. At least one regularly scheduled meeting of the Board shall be held each calendar quarter. It is anticipated that there could be other meetings scheduled during the year, as needed, with as much advanced notice as practicable.
The Chairman shall prepare an agenda for each meeting. The agenda shall set forth the items to be considered by the Board at each of its specified meetings during the year. Each Board member may suggest items or topics for inclusion at the current or future meetings.
Information and materials that are important to the Board’s understanding of the agenda items and other topics to be considered at a Board meeting shall, to the extent practicable, be distributed sufficiently in advance of the meeting to permit prior review by the directors. In the event of a need for the Board to meet on short notice or if such materials would otherwise contain highly confidential or sensitive information, it is recognized that written materials may not be available in advance of the meeting. It is anticipated that each Board member will review all materials provided for a Board meeting in advance of the meeting.
The non-management directors of the Company shall meet in executive session periodically, and no less often than annually, without management present, and shall be free to request such sessions at their discretion. Each year, at the first meeting of the Board after the annual meeting of the members of Ohio National Holdings, Inc. a chairperson from the Governance, Audit or Compensation Committees will be designated to serve as the facilitator at any executive session of the Board. The chairperson selected for such role shall serve in such capacity until the next annual meeting. Each year the prior executive session facilitator will be replaced by a different chairperson of one of the committees described above.
A director is expected to spend the time and effort necessary to properly discharge the director’s responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board and committees on which such director sits. A director who is unable to attend a meeting (which it is understood may occur on occasion) is expected to notify the Chairman of the Board or the Chair of the appropriate committee in advance of such meeting. Participation in person is strongly encouraged, but participation by other means is acceptable where permitted by law, the Articles, the Regulations and/or the applicable committee charter.
The Board encourages the Chief Executive Officer to bring members of management, from time to time, into Board meetings to (i) provide management insight into items being discussed by the Board which involve the manager’s area of responsibility; (ii) make presentations to the Board on matters which involve the manager’s area of responsibility; and (iii) bring managers with significant leadership potential into contact with the Board. Attendance of such management personnel at Board meetings is at the discretion of the Board and Chief Executive Officer.

Board committees

- The standing committees of Ohio National Holdings, Inc. are: Audit, Executive and Governance.
- The standing committees of Ohio National Financial Services, Inc. are: Audit, Executive, Governance, Corporate Opportunity, Compensation and Investment Review.
- The standing committees of The Ohio National Life Insurance Company are: Audit, Executive, Compensation, Governance and Investment Review.
The purpose and responsibilities of the standing committees are outlined in committee charters adopted by the Board.
The Board may form ad hoc committees, from time to time, at its discretion.
The Audit Committee, the Governance Committee and the Compensation Committee shall be composed entirely of Independent Directors satisfying applicable legal and regulatory requirements, if any, necessary for an assignment to any such committee.
The Governance Committee shall be responsible for making recommendations to the Board with respect to the assignment of Board members to the committees, giving consideration to appropriate experience and qualifications and to the recommendation of the Chairman of the Board and/or CEO. After reviewing the Governance Committee’s recommendations, the Board shall be responsible for appointing the Chair and Board members to the committees on an annual basis.
Typically, the parallel committees of each affiliated company may meet simultaneously. A Board member may serve on the parallel committee for multiple affiliated companies. For example, a Board member who sits on the Board of Ohio National Holdings, Inc., Ohio National Financial Services, Inc. and The Ohio National Life Insurance Company could also be a member of the Audit Committee of all three companies. If any member of a committee believes that there is a potential, material conflict between the interests of the affiliated companies on a matter before the committees, then
1. the committees should jointly discuss the potential, material conflict of interest in order to decide whether there is, in fact, such a potential, material conflict of interest;
2. if the committees are unable to decide whether such a potential, material conflict of interest exists, the committees should consult with inside or outside legal counsel on the issue; and
3. if it is ultimately determined that a potential, material conflict of interest exists, then such matter shall be referred to each company’s full board for consideration and resolution in accordance with the Articles and Regulations.

The Board shall be responsible for identifying potential candidates for, and selecting, the Company’s Chief Executive Officer. In identifying potential candidates for, and selecting, the Company’s Chief Executive Officer, the Board shall consider, among other things, a candidate’s experience, understanding of the Company’s business environment, leadership qualities, knowledge, skills, expertise, integrity, and reputation in the business community.
The Board shall be apprised of the Compensation Committee’s evaluations of the executive officers’ performance and its decisions concerning their compensation.
The Board has the responsibility to provide for the Company’s leadership via the positions of Chairman of the Board and Chief Executive Officer (may be the same person), as well as overseeing management succession for other senior management positions. The Chief Executive Officer, with the Governance Committee, shall prepare succession plans, which shall be discussed with, and reviewed by, the Board. Succession planning shall include long-term succession considerations and short-term or crisis succession planning, and shall be kept current and reviewed periodically with the Board – but no less often than bi-annually.

A copy of the Company’s Code of Ethics is attached hereto and is incorporated herein. The Board and all officers of the Company shall adhere to the Company Code of Ethics adopted by the Board, as modified from time to time. Any alleged violation of the Code of Ethics involving Board members shall be referred to and resolved by the Governance Committee.

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