Audit Committee Charter
(Approved February 17, 2011)
The Audit Committee (the "Committee") is created by the Board of Directors (the "Board") of Artio Global Investors Inc. (the "Company").
The Committee will assist the Board in its oversight of:
the integrity of the financial statements of the Company;
the systems of internal controls regarding finance, accounting and legal compliance;
the qualifications, independence and performance of the Company's independent auditor;
the performance of the Company's internal audit function; and
compliance by the Company with legal and regulatory requirements.
In addition, the Committee will comply with rules of the U.S. Securities and Exchange Commission ("SEC") related to the preparation of the report of the Committee required to be included in the Company's annual proxy statement.
The Committee shall consist of at least three members, each of whom shall be a member of the Board and shall meet the independence and experience requirements of the New York Stock Exchange ("NYSE"). No member of the Committee shall simultaneously serve on the audit committees of more than two other public companies unless the Board, upon the recommendation of the Nominating and Corporate Governance Committee of the Board, determines that such service does not impair the ability of such member effectively to serve on the Committee.
The Nominating and Corporate Governance Committee shall recommend nominees for appointment to the Committee annually and as vacancies or newly created positions occur. Committee members shall be appointed by the Board and may be removed by the Board at any time. The members of the Committee may select a Chairman from among the members, or, if they do not, the Board may designate a Chairman in consultation with the Nominating and Corporate Governance Committee. Top
The Committee shall meet as often as it determines is appropriate to carry out its responsibilities under this charter, but not less frequently than quarterly. The Chairman of the Committee, in consultation with the other committee members, shall determine the frequency and length of the committee meetings and shall, with the assistance of management, set meeting agendas consistent with this charter.
The Committee shall meet separately, periodically, with management, with internal auditors or other personnel responsible for the internal audit function and with the independent auditor. The Committee may ask representatives of the Company, management or others to attend meetings to provide pertinent information or insight.
The Committee may delegate its authority to subcommittees or the Chairman of the Committee when it deems appropriate and in the best interests of the Company. Any decisions made by any such subcommittee or the Chairman shall be reported to the Committee at its next scheduled meeting.
Appropriate records shall be created and maintained in the records of the Company for (a) each meeting of the Committee or any subcommittee thereof, (b) any action taken by the Chairman of the Committee pursuant to specific authority granted by this charter and (c) any action taken by the Committee by written consent.Top
In addition to any other responsibilities which may be assigned from time to time by the Board, the Committee is responsible for the following matters.
A. Review of Financial Statements, Disclosure and Internal Control
1. Prior to the filing of each Annual Report on Form 10-K, the Committee shall meet to review and discuss with management and the independent auditor: the audited financial statements; Management's Discussion and Analysis of Financial Condition and Results of Operations; management's assessment of internal control over financial reporting and the independent auditor's attestation thereof pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX"); the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") certifications provided in accordance with Sections 302 and 906 of SOX; and disclosure of fees paid to the independent auditor. The Committee shall also discuss with the independent auditor the matters required to be discussed by the Statement on Auditing Standards No. 114. Based on these reviews and discussions, and such other matters as the Committee may choose to consider, the Committee shall determine whether to recommend to the Board that the Company's audited financial statements be included in the Form 10-K.
2. Prior to the filing of each Quarterly Report on Form 10-Q, the Committee shall meet to review and discuss with management and the independent auditor: the interim financial statements; Management's Discussion and Analysis of Financial Condition and Results of Operations; and the CEO and CFO certifications provided in accordance with Sections 302 and 906 of SOX.
3. The discussion of the CEO and CFO certifications shall include (a) whether there are any significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to affect the Company's ability to record, process, summarize and report financial information, and (b) whether there has been reported any fraud involving management or other employees with a significant role in internal control over financial reporting.
4. The Committee shall review with management, the internal auditors and the independent auditor, as appropriate, and in separate meetings if the Committee deems it necessary, any audit problems or difficulties and management's response thereto, including those matters required to be discussed with the Committee by the auditor pursuant to Statement on Auditing Standards No. 114, as amended, including without limitation any significant disagreements between management and the independent auditor, and those matters listed on Appendix A. The Committee is authorized to add items to Appendix A without consulting with the Board or any other committee thereof.
5. The Committee shall review with management the Company's policies regarding the provision of financial information to equity analysts and rating agencies, including in each case the type of information to be disclosed and type of presentation to be made, paying particular attention to the use of financial information that does not comply with generally accepted accounting principles ("GAAP").
6. The Chairman of the Committee shall review any of the Company's financial information and earnings guidance provided to analysts and ratings agencies and any of the Company's other financial disclosures, such as earnings press releases, as the Chairman deems appropriate. The Committee shall discuss with management policies with regard to the types of information to be disclosed and the types of presentation to be made in and with respect to the above disclosures.
7. In connection with its oversight responsibilities, the Committee shall be directly responsible for the resolution of disagreements between management and any auditor regarding the Company's financial reporting.
8. The Committee shall review the Company's compliance with laws and regulations, including major legal and regulatory initiatives. The Committee shall also review significant litigation or investigations.
9. The Committee shall prepare the Audit Committee Report that the SEC rules require to be included in the Company's annual proxy statement.
B. Reporting to the Board
1. At each regular meeting of the Board, the Chairman of the Committee shall make a report regarding the activities of the Committee since the last such report. This report shall include a review of any recommendations or issues that arise with respect to matters contemplated by this charter, any other matters that the Committee deems appropriate, and any matters requested to be included by the Board.
2. At least annually, the Committee shall evaluate its own performance and report to the Nominating and Corporate Governance Committee on such evaluation.
3. The Committee shall periodically review and assess the adequacy of this charter and recommend any proposed changes to the Nominating and Corporate Governance Committee.
C. Independent Auditor
1. The Committee shall be directly and solely responsible for the appointment, compensation, retention and oversight of the work of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company (subject, if applicable, to shareholder ratification). Each such accounting firm shall report directly to the Committee.
2. The Committee shall pre-approve the audit services and non-audit services to be provided by the Company's independent auditor pursuant to pre-approval policies and procedures established from time to time by the Committee. The Committee may delegate its authority to pre-approve services to one or more Committee members, provided that such designees present any such approvals to the full Committee at the next Committee meeting.
3. The Committee shall review and approve the scope, staffing and timing of the independent auditor's annual audit plan(s) and discuss significant findings from the audit, including any problems or difficulties encountered.
4. The Committee shall evaluate the independent auditor's qualifications, performance and independence, and shall present its conclusions with respect to the independent auditor to the full Board on at least an annual basis. As part of such evaluation, at least annually, the Committee shall:
a. obtain and review a report or reports from the Company's independent auditor;
b. describing the independent auditor's internal quality-control procedures;
c. describing any material issues raised by (i) the most recent internal quality-control review, or peer review, of the auditing firm, or (ii) any inquiry or investigation by governmental or professional authorities, within the preceding five years, regarding one or more independent audits carried out by the auditing firm; and any steps taken to deal with any such issues;
d. describing all relationships between the independent auditor and the Company consistent with Independence Standards Board Standard No. 1;
e. assuring that Section 10A of the Securities Exchange Act of 1934 has not been implicated;
f. review and evaluate the senior members of the independent auditor team, particularly the partners on the audit engagement team;
g. consider whether the independent auditor should be rotated, so as to assure continuing auditor independence; and
h. obtain the opinion of management and the internal auditors of the independent auditor's performance.
5. The Committee shall establish policies for the Company's hiring of current or former employees of the independent auditor.
D. Internal Auditors
1. At least annually, the Committee shall evaluate the performance, responsibilities, budget and staffing of the Company's internal audit function and review the internal audit plan. Such evaluation shall include a review of the responsibilities, budget and staffing of the Company's internal audit function with the independent auditor.
2. At least annually, the Committee shall evaluate the performance of the senior officer or officers responsible for the internal audit function of the Company, and make recommendations to the Board and management regarding the responsibilities, retention or termination of such officer or officers.
3. The foregoing evaluations shall be undertaken with reference to standards promulgated by the Institute of Internal Auditors, pursuant to which the Company's internal audit function is managed.
E. Other Risk Management and Compliance Matters
1. The Committee shall establish procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. The Committee shall review any significant complaints regarding accounting, internal accounting controls or auditing matters received pursuant to such procedures.
2. The Committee shall review the Company's policies and practices with respect to risk assessment and risk management, including discussing with management the Company's major financial risk exposures and the steps that have been taken to monitor and control such exposures.
3. The Committee shall review periodically, and at least annually, with the Company's counsel any legal matters that could have a significant impact on the Company's financial statements, the Company's compliance with applicable laws and regulations, and inquiries received from regulators, government agencies or the New York Stock Exchange.
The Committee is authorized (without seeking Board approval) to retain special legal, accounting or other advisors and may request any officer or employee of the Company or the Company's outside counsel or independent auditor to meet with any members of, or advisors to, the Committee.
The Company shall provide appropriate funding, as determined by the Committee, for payment of:
compensation to any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;
compensation to any advisers employed by the Committee; and
ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
VI. Limitations Inherent in the Audit Committee's Role
The Committee has the powers and responsibilities delineated in this Charter. It is not the duty of the Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate and are in accordance with GAAP and applicable rules and regulations. This is the responsibility of management and the independent auditor. Furthermore, while the Committee is responsible for reviewing the Company's policies and practices with respect to risk assessment and management, it is the responsibility of the CEO and senior management to determine the appropriate level of the Company's exposure to risk. Committee members are not full-time Company employees and are not performing the function of auditors or accountants.
Appendix A: Topics for Discussion (including those pursuant to SAS 114)
Whenever the charter requires, and at such other times as the Audit Committee may wish, members of the Audit Committee will discuss the following matters with management and with representatives of the independent auditor:
1. any analyses or other written communications prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of using alternative GAAP methods on the financial statements;
2. the critical accounting policies and practices of the Company;
3. off-balance sheet transactions and structures;
4. any significant issues regarding accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles;
5. the effect of regulatory and accounting initiatives or actions applicable to the Company (including any SEC investigations or proceedings);
6. any restrictions on the scope of the independent auditor's activities or on access to requested information;
7. any accounting adjustments that were noted or proposed by the auditor but were "passed" (as immaterial or otherwise);
8. any communications between the audit team and the audit firm's national office regarding auditing or accounting issues presented by the engagement;
9. any management or internal control letter issued, or proposed to be issued, by the auditor;
10. any disagreements between management and the independent auditor regarding matters that could be significant to the Company's financial statements or the opinion to be issued by the independent auditor; and
11. whether management has consulted with other audit firms.