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Aon Corporation Finance Committee Charter
March 2008
I. Purpose
The Finance Committee (the “Committee”) is a standing committee of the Board of Directors (the “Board”) of Aon Corporation (the “Company”). The primary purpose of the Committee is to assist the Board with monitoring and overseeing the balance sheet of the Company, including the capital management strategy, capital structure, investments, returns and related policies. The oversight responsibility of the Committee shall not extend to financial reporting, which shall be the responsibility of the Audit Committee of the Board.
II. Membership, Structure and Organization
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Members. The membership of the Committee shall be determined by the Board of Directors and shall consist of three (3) or more Directors who are not members of management. The Board shall also appoint a Committee Chairperson. A majority of the members of the Committee shall meet the independence requirements of the New York Stock Exchange (the “NYSE”) and any other applicable regulations. The Board may remove any member from the Committee at any time.
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Meetings. The Committee shall meet as frequently as it determines, but not less than three (3) times per year. Meetings of the Committee may be held telephonically. The Committee may elect to meet from time to time in executive session at its discretion.
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Delegation of Authority. To the extent permitted by applicable law and the listing standards of the NYSE, the Committee may establish subcommittees consisting of one or more members, other directors and management to carry out such duties as the Committee may delegate.
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Resources. The Committee has the authority to retain such outside advisors, including legal counsel or other experts, as it deems appropriate, and to approve the fees and expenses of such advisors.
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Charter. The Committee shall annually review and reassess the adequacy of this charter and recommend any proposed changes to the Board for approval.
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Agenda, Minutes and Reports. The Chairperson of the Committee shall be responsible for setting the agendas for meetings. The agenda and information concerning the business to be conducted at each Committee meeting shall, to the extent practicable, be communicated to members sufficiently in advance of each meeting permit meaningful review. The Chairperson of the Committee will report regularly to the full Board on the Committee’s activities, findings and recommendations, including the results of the Committee evaluation. The report to the Board may take the form of an oral report by the Chairperson or by any other member of the Committee designated by the Chairperson to make such report. The Corporate Secretary shall assist the Committee in maintaining minutes or other records of meetings and activities.
III. Responsibilities
The responsibilities of the Finance Committee shall include the following:
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Long-term Capital Plan. The Committee shall review the capital plan of the Company and provide advice and guidance on the sources and uses of capital and expected returns on capital deployed.
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Capital Structure and Management. The Committee shall review, as it deems appropriate, the Company’s financial policies, capital structure and strategy for obtaining financial resources, and make such reports and recommendations to the Board with respect thereto as it deems advisable. The Committee shall periodically review the Company’s share repurchase activities and plans and recommend to the Board any share repurchase programs deemed necessary or advisable by the Committee. The Committee shall also review and make recommendations to the Board with respect to the Company’s dividend policy.
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Mergers, Acquisitions and Divestures. In accordance with the Company’s policies and practices for mergers, acquisitions and divestitures, including thresholds for review and approval, as established by the chief financial officer and approved by the Board, the Committee shall review proposed mergers, acquisitions, joint ventures and divestitures involving the Company and its subsidiaries and make recommendations, as appropriate, to the full Board. The Committee shall also monitor the financial performance of mergers and acquisitions completed by the Company and make recommendations to the Board regarding improvements to the Company’s mergers and acquisitions process and procedures.
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Private Equity Investments. The Committee shall review and approve all private equity and other strategic investments of the Company, exclusive of those investments made by the underwriting companies or the Company’s pension plans. The Committee shall also review and approve the Company’s policies applicable to employees that govern the acquisition of ownership stakes in entities, funds or assets other than through a liquid or publicly-traded security.
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Benefit and Retirement Plans. The Committee shall oversee the financial, investment and actuarial policies and objectives of the Company’s ERISA-qualified benefit plans (the “Plans”), and shall review the investment performance of the Plans. With respect to non-U.S. benefit and retirement plans, the Committee shall periodically review investment performance, make recommendations regarding investment guidelines, and provide other guidance and non-binding recommendations to the various plan trustees.
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Corporate Financing. The Committee shall review and make recommendations to the Board with respect to the issuance of securities by the Company, and the offering terms of such securities.
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Treasury Activities. The Committee shall have general oversight responsibility for the Company’s treasury activities, including, without limitation, premium trust funds, inter-company loans, material banking arrangements and credit facilities, use of derivatives and management of foreign exchange risk. In this capacity, the Committee shall review and recommend to the Board policies governing the Company’s investments and treasury practices, and monitor and oversee the Company’s corporate banking relationships.
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Risk Management/Insurance Coverage. The Committee shall periodically review the Company’s overall risk management program and major insurance programs. In addition, the Committee shall review significant financial exposures and contingent liabilities of the Company, including the use of derivatives and other risk management techniques.
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Underwriting Segment Investments. Pending completion of planned disposal transactions and run-off programs, the Committee shall review the annual investment performance of each underwriting unit against the investment policies and guidelines established by the respective board of directors or investment committee of each such underwriting unit.
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Committee Evaluation. The Committee shall perform an annual review of its performance, including a review of compliance with this charter. The Committee shall conduct such evaluation and review in such manner as it deems appropriate and report the results of the evaluation to the Board.
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Other Duties. The Committee shall also carry out such other duties as may be delegated to it by the Board from time to time.
Approved by the Finance Committee – February 15, 2008
Approved by the Board of Directors – March 14, 2008