Committees of the Board

Aetna's Board Committees as of July 28, 2014

Director

Audit

Compensation and Talent Management

Executive

Investment and 
Finance

Medical Affairs

Nominating and Corporate Governance

X

X

C

X

X

X

X

X

X

X

C

C

X

X

X

X

X

X

X

X

C

C

X

X

X

X

X

C

X

X

X

X

X

C Committee Chair
X Member

Audit Committee

Assists the Board in its oversight of (1) the integrity of the financial statements of the Company, (2) the independent accountants' qualifications and independence, (3) the performance of the Company's internal audit functions and independent accountants, and (4) the compliance by the Company with legal and regulatory requirements. The Board of Directors has determined that all members of the Committee meet the independence, financial literacy and expertise requirements for audit committee members set forth in the New York Stock Exchange listing standards. Additionally, the Board of Directors has determined that each Committee member has the requisite attributes of an "audit committee financial expert" as defined by the Securities and Exchange Comission.

The Audit Committee can be confidentially contacted by those wishing to raise concerns or complaints about the Company's accounting, internal accounting controls or auditing matters by calling AlertLine®, an independent toll-free service, at 1-888-891-8910 (available seven days a week, 24 hours a day), or by writing to: Corporate Compliance, P.O. Box 370205, West Hartford, CT 06137-0205.

Committee on Compensation and Talent Management

Discharges the Board's responsibilities relating to compensation of executives. The Board has determined that all members of the Committee meet the independence requirements set forth in the New York Stock Exchange listing standards.

Executive Committee

Acts on behalf of the full Board between regularly scheduled Board meetings, usually when timing is critical.

Investment and Finance Committee

Assists the Board in reviewing the Company's investment policies, strategies, transactions and performance and in overseeing the Company's capital and financial resources.

Medical Affairs Committee

Assists the Board in general oversight of policies and practices that relate to providing members with access to quality health care.

Nominating and Corporate Governance Committee

Assists the Board in identifying and recommending individuals to the Board for nomination as Board and Committee members, and Board corporate governance principles. The Board has determined that all members of the Committee meet the independence requirements set forth in the New York Stock Exchange listing standards.

Audit Committee charter
Purpose of Committee

The primary purpose of the Audit Committee (the "Committee") of the Board of Directors (the "Board") of Aetna Inc. (the "Company") is to assist the Board in its oversight of (1) the integrity of the financial statements of the Company, (2) the independent accountants' qualifications and independence, (3) the performance of the Company's internal audit function and independent accountants, and (4) the compliance by the Company with legal and regulatory requirements. The Committee shall also prepare the disclosure required by Item 407(d)(3)(i) of Securities and Exchange Commission ("SEC") Regulation S-K. 

The Committee shall provide a forum for private and direct communications between Committee members and the Company's independent accountants, Internal Audit Department, Chief Compliance Officer and senior financial management. The Committee shall serve as a channel of communication to the Board for the Company's independent accountants, Chief Compliance Officer and Internal Audit Department. The Committee also shall, upon request, provide prompt access for the independent accountants, Chief Compliance Officer and Internal Audit Department to meet directly with the Board. In addition, the Committee will establish procedures to receive, retain and treat complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.

The function of the Audit Committee is oversight. The management of the Company is responsible for the preparation, presentation and integrity of the Company's financial statements and management's annual assessment of the Company's internal controls over financial reporting. Management is responsible for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent accountants are responsible for planning and carrying out proper annual audits and quarterly reviews of the Company's financial statements. Management and the Chief Compliance Officer's organization are responsible for maintaining an effective compliance and ethics program designed to assure compliance with applicable laws and regulations. In fulfilling their responsibilities hereunder, it is recognized that members of the Committee are not full-time employees of the Company and, as such, it is not the duty or responsibility of the Committee or its members to conduct auditing or accounting reviews or procedures. Each member of the Committee shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data prepared or presented by officers or employees of the Company, legal counsel, independent accountants or other persons with professional or expert competence.

Committee Membership

The Committee shall be composed of at least three Directors, who shall satisfy the applicable independence, experience and other membership requirements under the rules of the New York Stock Exchange, Inc. (the "NYSE"), as such requirements are interpreted by the Board in its business judgment, and under applicable law.

All new Committee members also participate in an Audit Committee Orientation Program where they are provided with appropriate background information about the Company and the workings of the Committee.

The members of the Committee shall be appointed annually and may be replaced by the Board.

Committee Structure and Operations 

The Board shall designate one member of the Committee as its Chairman. The Committee shall meet as often as necessary to carry out its responsibilities under this Charter, but at least five times a year. The Committee shall make regular reports to the Board.

The Committee is empowered, to the extent it deems necessary or appropriate, to retain outside legal, accounting or other advisers having special competence as necessary to assist it in fulfilling its responsibilities and duties.

Committee Authority and Responsibilities  

The Committee is directly responsible for the appointment, compensation, retention and oversight of the work of the independent accountants and any other accounting firm engaged to perform audit, review or attest services (including the resolution of any disagreements between management and any auditor regarding financial reporting). The independent accountants and any other such accounting firm will report directly to the Committee.

The Committee shall have available appropriate funding from the Company, as determined by the Committee, for compensation to the independent accountants, any other accounting firm or other advisers engaged, and for the Committee's ordinary administrative expenses.

The Committee is authorized to perform each of the specific duties set forth herein and any other duties it considers necessary or advisable to carry out its purpose, responsibilities and its specific duties. To the extent relevant to carrying out its purpose, responsibilities and duties, the Committee is empowered to recommend that any activity of the Company be investigated and, in appropriate circumstances, the Committee is empowered to investigate any activity of the Company.

The Committee Chairman sets the meeting agendas in consultation with management and other Committee members. Among other things, an assessment of potential risks of the Company conducted by management and the Internal Audit Department is taken into account in setting the Committee's agendas, in consultation with the independent accountants.

Specific Duties 

In discharging its responsibilities, the Committee shall perform the following duties, as well as any other additional duties as may be required by NYSE rule or applicable law:


Relationship with Independent Accountants


a. The Committee will annually review the qualifications, performance and independence of the independent accountants. The Committee's evaluation shall also include the review and evaluation of the lead partner of the independent accountants. In conducting this review, the Committee shall obtain and review a report from the independent accountants describing (a) the independent accountants' internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues, (c) any significant litigation against the firm, and (d) all relationships between the independent accountants and the Company. The Committee will actively engage in a dialogue with the independent accountants with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent accountants. The Committee shall discuss with the independent accountants the rotation of the lead audit partner or other members of the independent accountants' audit team. The Committee periodically shall consider whether it is appropriate to rotate the independent accountants. The Committee will also confer with management and the internal auditors in reviewing the qualifications, performance and independence of the independent accountants. The Committee shall present its conclusions to the Board.


b. The Committee shall pre-approve all audit engagement fees and terms and all non-audit engagements with the independent accountants. The Chairman of the Committee may pre-approve any proposed engagements that arise between Committee meetings, provided that any such decision is presented to the full Committee at its next scheduled meeting.


c. Meet in private session with the independent accountants at each regularly scheduled in-person meeting of the Committee.


d. Review with the independent accountants the planning, staffing and scope of their examination with emphasis on accounting and financial areas where the Committee, management or the accountants believe special attention should be directed.


e. Review with the independent accountants:


1. results of their audit, including their opinion on the financial statements,


2. their consideration of the internal control structure and their evaluation regarding the adequacy of those controls over the financial reporting process, including computer controls and security, as well as special audit steps, if any, adopted in light of material control issues,


3. alternative GAAP methods discussed with management, ramifications of alternative disclosures and treatment preferred by the independent accountants,


4. critical accounting policies and practices,


5. any audit problems or difficulties and management's response, including

  • accounting adjustments noted or proposed by the independent accountants but not recorded,
  • issues discussed with the independent accountants' national office,
  • any management or internal control letter issued or proposed by the independent accountants to the Company,
  • significant disagreements, if any, with management,
  • cooperation received from management in the conduct of the audit,
  • time constraints on the independent accountants, and
  • any restrictions on the scope of activities or on access to requested information,

 6. any other material written communication between the independent accountants and management, and


7. other matters related to the conduct of the annual audit or the review of quarterly financial results required to be communicated to the Committee under applicable law, auditing standards or other professional accounting standards.


Relationship with Internal Audit Department

a. Review, consult and concur with management in management's appointment, replacement, reassignment and/or dismissal of the Director of Internal Audit.  The Committee Chairman will review and concur with management in connection with the development of management's recommendations to the Board's Committee on Compensation and Organization for the compensation of the Director of Internal Audit.


b. Meet in private session with the Director of Internal Audit at each regularly scheduled in-person meeting of the Committee.


c. Review and approve the Internal Audit Department's objectives and resources and its annual audit plan, including its coordination with the examination performed by the independent accountants. Also review such matters with the independent accountants. Review the Internal Audit Department's effectiveness, organizational position, objectivity and status within the Company. 


d. Review the results of the Internal Audit activities for the year. Review their consideration of the internal control structure and their evaluation regarding the adequacy of those controls over the financial reporting process, including computer controls and security.


e. Review periodically the Internal Audit Department's written Charter and inquire whether the Department is in compliance with relevant professional standards.

 

Relationship with Chief Compliance Officer

a. The Chief Compliance Officer is authorized to communicate promptly and personally to the Committee on all matters he or she deems appropriate, including without limitation on any matter involving criminal conduct or potential criminal conduct.


b. The Chief Compliance Officer shall communicate personally to the Committee no less than annually on the implementation and effectiveness of the Company's compliance and ethics program.


Relationship with Management


a. Meet in private session with management at each regularly scheduled in-person meeting of the Committee; also meet in private session regularly with the General Counsel regarding legal compliance matters (including violations of law and breaches of fiduciary duties).


b. Review their consideration of the internal control structure and their evaluation regarding the adequacy of those controls over the financial reporting process, including computer controls and security and controls over investments. Review and discuss management's annual report required by applicable law with respect to the Company's internal controls, and the process by which the report is produced.


c. Before publication, meet to review and discuss with management and the independent accountants the annual financial statements and quarterly financial statements, related footnotes and related disclosures, including reviewing the specific disclosures under management's discussion and analysis of financial condition and results of operations and to review management's annual assessment of the Company's internal controls over financial reporting and the independent accountant's annual attestation thereof. Review and discuss the Chief Executive Officer's and Chief Financial Officer's quarterly certification required by applicable law with respect to the Company's financial statements and reports and other matters filed with the SEC, as well as management's annual certification required by NYSE rule with respect to compliance with listing standards, and the process by which these certifications are produced. Discuss earnings press releases, including the use of "pro forma" or "adjusted" non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies.


d. Discuss all critical accounting policies and practices, and any significant changes in selection or application of accounting principles proposed by management.


e. Discuss significant accounting accruals, reserves or other estimates made by management, including reviewing the actuarial reports concerning the annual actuarial opinions. Discuss management's medical cost forecasting, processes, management of medical costs and related product pricing issues.


f. Discuss any other analyses prepared by management and/or the independent accountants setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements.


g. Discuss with management and the independent accountants any correspondence with regulators or governmental agencies that raise material issues regarding the Company's financial statements or accounting policies.


h. Discuss the significant accounting, reporting, regulatory and other developments affecting the Company's annual and quarterly financial statements, related footnotes and related disclosures.


i. Review the effect of any off-balance sheet structures on the Company's annual and quarterly financial statements, related footnotes and related disclosures.


j. Inquire whether a second opinion regarding a significant accounting matter had been sought and, if so, discuss the accounting method selected.


k. Review management letter comments received and management's response to/implementation of those comments.

l. Periodically review with the General Counsel significant litigation and regulatory matters involving the Company and review with the General Counsel and independent accountants related disclosures made in the annual financial statements and related footnotes.

m. Periodically review the Chief Financial Officer's organization, including its resources.


Other

a. Discuss periodically management's policies with respect to risk assessment and risk management, and discuss periodically with the independent accountants, management and Internal Audit Department significant financial risk exposures and the steps management has taken to monitor, control and report such exposures. Discuss periodically management's procedures regarding disaster recovery and business continuity. Discuss periodically the company's insurance programs.


b. Consider whether there are any emerging issues which the Committee should become involved with in the future.


c. Review transactions or courses of dealing with parties related to the Company which are significant in size or involve terms or other aspects that differ from those that would likely be negotiated with independent parties and that are relevant to an understanding of the Company's financial statements.


d. Discuss periodically with management the program that management establishes to monitor compliance with the Company's code of conduct and laws and regulations, and control systems related to compliance with internal policies. Review provider and other fraud activity.


e. Discuss periodically with management risks associated with significant outsourced projects.


f. Meet in executive session at each regularly scheduled in-person meeting of the Committee.


g. Establish Company policies for the hiring of employees or former employees of the independent accountants.


h. Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.


i. Evaluate the Committee's performance annually.


j. Perform any other responsibilities delegated to the Committee by the Board from time to time.

Amended:  January 18, 2013
Reviewed:  December 5, 2013

Committee on Compensation and Talent Management Charter
Purpose of Committee

The primary purpose of the Committee on Compensation and Talent Management (the “Committee”) of the Board of Directors (the “Board”) of Aetna Inc. (the “Company”) is to discharge the Board’s responsibilities relating to compensation and talent management of the Company’s executives.  In doing so, the Committee shall: 

  1. review and approve executive compensation philosophy and strategy including appropriate peer group and target compensation positioning;
  2. evaluate executive officers’ corporate and individual performance in light of goals and objectives and determine the compensation levels of the Company’s executive officers and other senior positions identified by the Committee;
  3. oversee compensation and benefits plans, policies and programs of the Company;
  4. administer the equity-based incentive compensation plans of the Company and the Company’s Section 162m Annual Incentive Plan;
  5. review and make recommendations on succession and development plans for the CEO and other key officers of the Company; and
  6. review the Company’s talent management and diversity strategies.

The Committee shall meet to review and discuss with management the specific executive compensation disclosures included in the compensation discussion and analysis section of the Proxy Statement and shall prepare a report recommending to the Board of Directors that the compensation discussion and analysis be included in the Proxy Statement.

Committee Membership

The Committee shall be composed solely of at least three members of the Board, each of whom is, in the business judgment of the Board, “independent” under the rules of the New York Stock Exchange, Inc.

The members of the Committee shall be appointed annually and replaced by the Board.

Committee Structure and Operations

The Board shall designate one member of the Committee as its chairperson. The Committee shall meet as often as necessary to carry out its responsibilities under this Charter, but at least three times a year. The Committee shall make regular reports to the Board. Except for grants and awards to executive officers, the Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.

The Committee, in its sole discretion, shall have the authority to retain or obtain the advice of a compensation consultant, independent legal counsel or other advisor. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any such compensation consultant, legal or other advisor retained by the Committee. In addition, the Company shall provide appropriate funding, as determined by the Committee, for the payment of reasonable compensation to such compensation consultant, legal or other advisor.

When selecting a compensation consultant, legal or other adviser to the Committee (other than in-house counsel), the Committee shall consider (i) the provision of other services to the Company; (ii) the amount of fees paid to the adviser as a percentage of the adviser's total revenue; (iii) the policies and procedures of the adviser's employer that are designed to prevent conflicts of interests; (iv) any business or personal relationship between the adviser and a member of the Committee; (v) any Company stock owned by the adviser; (vi) any business or personal relationship of the adviser and an executive officer of the Company; and (vii) any other factor deemed relevant to the adviser's independence from management.

Committee Responsibilities and Authority

The following are the goals and responsibilities of the Committee:

  1. To annually review and approve corporate goals and objectives relevant to CEO and other executive officer compensation, evaluate their performance in light of those goals and objectives, and establish their compensation levels based on this evaluation. In determining the long-term incentive component of CEO and other executive officer compensation, the Committee will consider the Company’s performance, the value of similar incentive awards to CEOs and other executive officers at comparable companies, and the awards given to the CEO and other executive officers in past years. The Committee also shall take into account the need to attract and retain high-performing executives. The Company’s CEO should not attend any portion of a meeting where the CEO’s performance or compensation is discussed, unless specifically invited by the Committee.
  2. To review and approve, for the CEO and the executive officers of the Company, (a) the annual base salary level, (b) the annual incentive opportunity level, (c) the long-term incentive level, (d) employment agreements, severance arrangements, and change-in-control agreements/provisions, in each case as, when and if appropriate, and (e) any special or supplemental benefits, arrangements or agreements, including perquisites. In determining the compensation of the CEO, the Committee shall consult with the non-management Directors of the Board. In determining the compensation of executive officers other than the CEO, the Committee shall consult with the CEO.
  3. To review and make recommendations on principles/process for selection and development of the CEO and key executives, including succession in the event of an emergency or retirement, for consideration by the Board, and to oversee the Company’s talent management and diversity strategies.
  4. To review and recommend to the Board proposed business affiliations of executive officers of the Company.
  5. To review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
  6. To evaluate its own performance annually.
  7. To perform any other responsibilities delegated to the Committee by the Board from time to time.

Amended:  January 31, 2014
Reviewed:  January 29, 2014

Executive Committee charter
Purpose of Committee

The primary purpose of the Executive Committee (the “Committee”) of the Board of Directors (the “Board”) of Aetna (the “Company”) is to act on behalf of the full Board between regularly scheduled Board meetings, usually when timing is critical. The Committee has and may exercise all of the powers and authority of the Board, subject to such limitations as the Board and/or applicable law may from time to time impose.

Committee Membership

The Committee shall be composed of at least three members of the Board, including the Chairman of the Board (the “Chairman”).

The members of the Committee shall be appointed annually and replaced by the Board.

Committee Structure and Operations

The Chairman shall be the chairperson of the Committee. The Committee shall meet at the call of the Chairman. The Committee shall report its actions to the Board.

The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain counsel and other experts or consultants.

January 31, 2003

Investment and Finance Committee charter
Purpose of Committee

The primary purposes of the Investment and Finance Committee (the "Committee") of the Board of Directors (the "Board") of Aetna Inc. (the "Company") are to assist the Board in reviewing the Company's investment policies, strategies, transactions and performance, and in overseeing the Company's capital and financial resources.

Committee Membership

The Committee shall be composed of at least three members of the Board.

The members of the Committee shall be appointed annually by the Board.

Committee Structure and Operations

The Board shall designate one member of the Committee as its chairperson. The Committee shall meet at least three times a year. The Committee shall make regular reports to the Board. The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to subcommittees of the Committee.

The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain counsel and other experts or consultants.

Committee Goals and Responsibilities

The following are the goals and responsibilities of the Committee:

  1. To oversee the investment policies, strategies, and programs of the Company and its subsidiaries.
  2. To delegate authority to management to execute individual investment transactions on behalf of the Company within policies and limits approved by the Committee and to approve investment transactions on behalf of the Company that exceed such delegated authority.
  3. To review investment transactions made on behalf of the Company and its subsidiaries.
  4. To review the performance of the investment portfolios of the Company and its subsidiaries.
  5. To oversee the Company's processes for managing the finances of its employee pension and defined contribution benefit plans. (In doing so, the Committee will receive reports on the investment policies and strategies established by the Company's internal benefit finance committee and the performance of the investment portfolios supporting these plans. It will also receive reports concerning the actuarial assumptions and funding policy established by the Company for the defined benefit pension plan.)
  6. To review the Company's Capital Plan and to review and provide guidance to the Board on significant financial policies and matters of corporate finance, including the Company's dividend policy, share repurchase program, and the issuance or retirement of debt and other securities.
  7. To review and provide guidance to the Board about proposed mergers, acquisitions, divestitures and other similar transactions.
  8. To review significant multi-year strategic capital project expenditures and management.
  9. To review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
  10. To evaluate its own performance annually.
  11. To perform any other responsibilities delegated to the Committee by the Board from time to time.

Amended:  December 28, 2005
Reviewed:  December 6, 2013

Medical Affairs Committee charter
Purpose of Committee

The primary purpose of the Medical Affairs Committee (the “Committee”) of Aetna Inc. (the “Company”) is to assist the Company’s Board of Directors (the “Board”) in the general oversight of the Company’s medical-related strategies, policies and practices that relate to promoting member health, enhancing access to cost-effective quality health care, and advancing safety and efficacy of care.

Committee Membership

The Committee shall be composed of at least three members of the Board. The members of the Committee shall be appointed annually and replaced by the Board.

The Company’s Chief Medical Officer shall support the Committee in identifying the issues and policies to be reviewed by the Committee, and in coordinating presentations and the distribution of information to the Committee.

Committee Structure and Operations

The Board shall designate one member of the Committee as its chairperson. The Committee shall meet as often as necessary to carry out its responsibilities under this Charter, but at least three times a year. The Committee shall make regular reports to the Board. The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.

The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain counsel and other experts or consultants.

Committee Goals and Responsibilities

Among the Committee’s goals and responsibilities are the following:

  1. To review significant medical-related strategies and initiatives of the Company; to consider the impact of those strategies and initiatives on member and provider engagement and loyalty, on overall quality and cost-effectiveness of care, and on differentiating the Company’s products and services in the marketplace.
  2. To review Company medical strategies, policies and procedures designed to enhance the effectiveness of the Company’s interaction with physicians, hospitals and other provider community constituents.
  3. To review the scope and effectiveness of the Company’s health promotion, care management and other clinical programs in promoting appropriate evidence-based care, increasing care safety and enhancing total member health and well-being.
  4. To review the Company’s medical strategies to integrate its clinical and data analytic capabilities in its products, to foster innovation in this area and to promote improvements in health and productivity.
  5. To review proposed and adopted changes in state and federal law and regulation to assess the implications for the Company's medical-related strategies, policies and practices.
  6. To review Company initiatives designed to address socioeconomic, racial and ethnic disparities in health care.
  7. To review and reassess the adequacy of this Charter annually and to recommend any proposed changes to the Board for approval.
  8. To evaluate its own performance annually.
  9. To perform any other responsibilities delegated to the Committee by the Board from time to time.

Amended:  September 23, 2011
Reviewed:  December 5, 2013

Aetna Nominating and Corporate Governance Committee charter
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