We believe effective corporate governance is a critical ingredient in ensuring not only the successful performance of our business, but also the ability to fulfill our social responsibilities.
At AOS, our corporate governance structure is designed to establish independent and effective oversight by our Board of Directors. The Board is actively involved in overseeing most important decisions affecting our business operations, including the adoption and implementation of our ESG programs. To ensure a strong independent Board, seven (7) out of the total nine (9) members of our Board satisfy the independence requirement of NASDAQ corporate governance rules. In addition, the Board has appointed a lead independent director who presides over all executive sessions of independent directors and coordinates activities and communications between management and the independent directors.
In addition, we have recently established the Shareholders Communications Subcommittee that is responsible for managing and providing oversight on ESG matters.
Our Shareholders Communications Subcommittee reviews, assesses, and recommends actions relating to our ESG capabilities and consults with our counsel and advisors regarding compliance with applicable laws, regulations and rules relating to ESG matters. The Shareholders Communications Subcommittee reports directly to the Board regarding ESG matters at least twice a year.
Our Board has adopted the Corporate Governance Policy to establish a framework within which it will conduct its business. We also provide our directors training on issues facing us and on subjects that would assist the directors in discharging their duties. In addition, the Board has adopted a share ownership guideline for our executive officers and non-employee members of the Board, which align the interests of our management members with those of our shareholders.
The Company and our Board are committed to a diverse, inclusive and equitable environment where all Board members, staff, volunteers and members feel respected and valued regardless of gender, age, race, ethnicity, national origin, sexual orientation or identity, disability, or any other bias. The Board believes in the benefits of having a Board composed of individuals with diverse skills, experience, backgrounds and perspectives as well as support for the mission of the Company. For purposes of Board composition, diversity includes, but is not limited to, business and industry skills and experience, gender and ethnicity. All Board appointments should collectively reflect the diverse nature of the business environment in which the Company operates and be made on merit, in the context of the skills, experience, qualification and knowledge which the Board requires to be effective. The Board is committed to comply with all federal, state and local laws and regulations regarding diversity of composition of the Board, including any diversity legislation enacted by state governments to the extent the Company is subject to such legislation. For example, we are in full compliance with California’s board diversity legislation that requires a minimum number of female directors and directors from underrepresented communities.
Our Code of Business Conduct & Ethics provides guidelines for our employees and members of the Board to exercise good judgment to ensure the safety and welfare of all personnel and to maintain a cooperative, efficient, positive, harmonious and productive work environment and business organization. The Code covers policies related to governance, ethics, and corporate social responsibility. It describes how we conduct business with integrity towards employees, customers, stockholders, suppliers, and all other third parties. It sets forth what the Company values, what we prohibit as a company, and highlights programs and resources to help employees meet these expectations.
In summary, the Code addresses the following topics:
The Company is committed to fostering ongoing dialogue with all its stakeholders through multiple channels and offers employees, business partners and other stakeholders an opportunity to report any suspected ethical issues or violations of the Code or law, and to do so anonymously (where permissible by law) or with attribution. The Company makes every effort to investigate reported concerns appropriately, consistently, and in a timely manner, including promptly responding to any concerns or reports of employee misconduct and inquiries from any government agency. Furthermore, during the fiscal year, the Company has committed additional resources to improve and enhance its legal and regulatory compliance capabilities, including the hiring of additional staff attorneys; implementing new corporate and compliance policies and procedures; and providing more training and educational opportunities to employees on compliance matters.