Charter of the Safety and Risk Committee
Charter of the Safety and Risk Committee
of the Board of Directors of
Landstar System, Inc.
As Adopted by the Board of Directors
on November 29, 2011
and Amended and Restated on May 18, 2020
This Charter sets forth, among other things, the purpose, membership and duties and responsibilities of the Safety and Risk Committee (the " Committee") of the Board of Directors (the "Board") of Landstar System, Inc. (the "Corporation").
The primary purposes of the Committee are to review and provide oversight to management with respect to: (a) the identification and evaluation of significant strategic, operational, regulatory, legal and other risks inherent in the business of the Corporation (the “Risks”) and the control processes with respect to the Risks; (b) the safety performance, goals and strategies of the Corporation; (c) the enterprise-wide risk identification, policies and procedures of the Corporation; and (d) the Corporation’s systems of operational controls regarding compliance with legal and regulatory requirements relating to the conduct of the Corporation’s business.
The Committee shall not have responsibility for matters subject to the jurisdiction of another committee of the Board pursuant to that committee’s charter. Without limiting the generality of the foregoing, the Audit Committee of the Board shall retain responsibility with respect to the quality and integrity of the Corporation’s financial statements, the performance of the Corporation’s internal audit function and independent auditor and the Corporation’s practices with respect to its internal control over financial reporting.
The Committee shall consist of at least three members. The members of the Committee shall be appointed by the action of a majority of the directors of the Board. Members of the Committee shall serve at the pleasure of the Board and for such term or terms as the Board may determine.
3. Structure and Operations
The Board shall designate one member of the Committee as its chairman. The affirmative vote of a majority of the members of the Committee is necessary for the adoption of any resolution, provided that the Committee may create one or more subcommittees and may delegate, in its discretion, all or a portion of its duties and responsibilities to such subcommittee.
The Committee shall have a regularly scheduled meeting at least twice a year at such times and places as shall be determined by the Committee chair to be necessary or appropriate, and may have such additional meetings as the Committee chair or a majority of the Committee’s members deem necessary or appropriate. The Committee may request (a) any officer or employee of the Corporation, (b) the management risk committee, the membership of which shall include, but not be limited to, the Chief Executive Officer, Chief Financial Officer, General Counsel, Chief Commercial Officer, Chief Safety and Operations Officer, Corporate Controller, the Director of Internal Audit, Vice President of Transportation Administrative Services and Chief Information Officer of the Corporation (the “Management Risk Committee”), (c) the Corporation’s outside counsel and (d) such other third party advisor to the Corporation or the Committee as the Committee deems appropriate to attend any meeting (or portions thereof) of the Committee, or to meet with any members of or consultants to the Committee, and to provide such information as the Committee deems necessary or appropriate.
Members of the Committee may participate in a meeting of the Committee by means of telephonic or video conference call, or similar communications arrangements by means of which all persons participating in the meeting can hear each other.
4. Duties and Responsibilities
The Committee’s duties and responsibilities shall include each of the items enumerated in this Section 4 and such other matters as may from time to time be delegated to the Committee by the Board.
- Review, assess and discuss with the Management Risk Committee: (i) the enterprise-wide risk identification, policies and procedures of the Corporation; (ii) any specific Risks that are believed by management to be reasonably likely to be significant to the business of the Corporation; (iii) steps taken by management to minimize or otherwise address the Risks; and (iv) any other policies of the Corporation with respect to identification, assessment and management of the Risks.
- Review with management the safety performance, goals and strategies of the Corporation, including with respect to all independent contractor business capacity owners under lease to a subsidiary of the Corporation and operating under the operating authority of such subsidiary.
- Review with management the performance, goals and strategies of the Corporation with respect to the on-time, safe and claim-free delivery of freight by the Corporation’s network of third party transportation service providers.
- Review with management the Corporation’s systems of operational controls regarding compliance with legal and regulatory requirements relating to the conduct of the Corporation’s business.
- Review with management the performance, goals and strategies of the Corporation with respect to the safety of its employee workforce, including, for example, with respect to illness or disease and other public health matters and related impacts on the operations of the Corporation.
- Review with management the Corporation’s insurance-based Risk management performance, goals and strategies, which may involve the use of arrangements with third party insurance and reinsurance companies, the Company’s captive insurance company, and self-insurance and other risk-retention practices.
- Review with management matters related to the security of and risks related to information technology systems and procedures.
- Review the Management Risk Committee’s enterprise-risk management assessment and related actions, if any, that may be recommended and advisable to address issues of Risk presented in such assessment through implementation of new controls, modification of existing controls, mitigation of the Risks and Risk disclosure.
- Review the disclosure by the Corporation of the Risks in filings with the U.S. Securities and Exchange Commission (including, for example, the “Risk Factors” section in the Annual Report on Form 10-K).
- Annually, the Committee shall conduct an evaluation of its performance and report on such evaluation to the Board.
5. Authority and Resources
The Committee may, without further approval by the Board, obtain such advice and assistance, including, without limitation, the performance of special reviews and other procedures, from outside consultants, legal counsel and other advisors as the Committee determines to be necessary or advisable in connection with the discharge of its duties and responsibilities hereunder. Any consultants, legal counsel and other advisor retained by the Committee may, but need not, be otherwise engaged by the Corporation for any other purpose. The Corporation shall pay to any advisor retained by the Committee pursuant to the preceding sentence such compensation, including, without limitation, usual and customary expenses and charges, as shall be determined by the Committee. The Corporation shall pay ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
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