Committees of the Board

Committees of the Board

Committees of the Board

The committees of the Board assist the Board in fulfilling and carrying out a defined set of activities and responsibilities  ​​​​​​​​​​​​​​

Our Articles of Association provide that the Board of Directors may delegate its powers to one or more committees of the Board of Directors as it deems appropriate to the extent such delegation is permitted under the Israeli Companies Law. Each committee exercising powers delegated by the Board of Directors must include at least one statutory independent director, and the audit committee must include all of the statutory independent directors. The Board of Directors has appointed the standing committees listed below, as well as committees appointed from time to time for specific purposes determined by the Board of Directors. Membership on these Board committees is presented in the table below.


We have adopted charters for our audit, human resources and compensation, corporate governance and nominating, and finance and investment committees, formalizing the committees’ procedures and duties.

Audit Committee

The Israeli Companies Law mandates the appointment of an audit committee comprising at least three
directors. Under the Israeli Companies Law, the audit committee must include all of the statutory independent
directors, one of which shall serve as the chairman of the committee, must be comprised of a majority of
directors meeting certain independence criteria and may not include certain directors. As a NYSE-listed
company, Teva’s audit committee must be comprised solely of independent directors, as defined by the SEC and
NYSE regulations.


Under the Israeli Companies Law, the audit committee is responsible for:

 

(a) identifying flaws in the management of a company’s business and making recommendations to the board of directors as to how to correct them;

 

(b) making determinations and considering providing approvals concerning certain related party
transactions and actions involving conflicts of interest;

 

(c) reviewing the internal auditor’s work program;

 

(d) examining the company’s internal control structure and processes, the performance of the internal auditor and whether the internal auditor has the tools and resources required to perform his or her duties;

 

(e) examining the independent auditor’s scope of work as well as the independent auditor’s fees and providing the corporate body responsible for determining the independent auditor’s fees with its recommendations; and

 

(f) implementing procedures concerning employee complaints on deficiencies in the administration of the company’s business and the protection to be provided to such employees.

 

Furthermore, the audit committee discusses the financial statements and presents to the Board its
recommendations with respect to the proposed financial statements. In accordance with the Sarbanes-Oxley Act and NYSE requirements, the audit committee is directly responsible for the appointment, compensation and oversight of the work of our independent auditors. In addition, the audit committee is responsible for assisting the Board in monitoring our financial statements, the effectiveness of our internal controls and our compliance with legal and regulatory requirements. The audit committee also discusses Teva policies with respect to risk assessment and risk management, including any off balance sheet arrangements, and reviews contingent liabilities and risks that may be material to Teva and major legislative and regulatory developments that could materially impact Teva’s contingent liabilities and risks. The audit committee charter sets forth the scope of the committee’s responsibilities, including its structure, processes and membership requirements; the committee’s purpose; and its specific responsibilities and authority with respect to registered public accounting firms, complaints relating to accounting, internal accounting controls
or auditing matters, and its authority to engage advisors as determined by the audit committee. All of the audit committee members have been determined to be independent as defined by the applicable NYSE and SEC rules and Ory Slonim has been designated by the audit committee as an independent director under the Israeli Companies Law.
The Board has determined that Prof. Dafna Schwartz, Joseph Nitzani and Erez Vigodman are “audit committee financial experts” as defined by applicable SEC regulations. See “Item 16A—Audit Committee Financial Expert” below.

Human Resources and Compensation Committee

The Israeli Companies Law mandates the appointment of a compensation committee comprising at least three directors. Under the Israeli Companies Law, the compensation committee must include all of the statutory independent directors, one of which must serve as the chairman of the committee, and the committee must include only additional members that satisfy the criteria for remuneration applicable to the statutory independent directors. Teva’s human resources and compensation committee includes only independent directors, as defined by the SEC and NYSE regulations.

Under the Israeli Companies Law, the compensation committee is responsible for:

 

(i) making recommendations to the board of directors with respect to the approval of the Compensation Policy and any extensions thereto;

 

(ii) periodically reviewing the implementation of the Compensation Policy and providing the board of directors with recommendations with respect to any amendments or updates thereto;

 

(iii) reviewing and resolving whether or not to approve arrangements with respect to the Terms of Office and Employment of office holders; and

 

(iv) determining whether or not to exempt a transaction with a candidate for chief executive officer from shareholder approval.

 

Furthermore, Teva’s human resources and compensation committee oversees, on behalf of the Board, the
management of Teva’s compensation and other human resources-related issues and otherwise carries out on
behalf of the Board its responsibilities relating to these issues. The committee is responsible for establishing
annual and long-term performance goals and objectives for Teva’s executive officers, as well as reviewing Teva’s overall compensation philosophy and policies and the implementation thereof, including with respect to executive officers and directors. In addition, the human resources and compensation committee reviews and approves any arrangement as to the terms of service and/or employment of executive officers or directors.

Corporate Governance and Nominating Committee

The role of the corporate governance and nominating committee is to

 

(i) identify individuals who are qualified to become directors;

 

(ii) recommend to the Board director nominees for each annual meeting of shareholders; and

 

(iii)  assist the Board in establishing and reviewing corporate governance principles and promoting good corporate governance at Teva.

 

All of the committee members must be determined to be independent as defined by the applicable NYSE rules and those of the SEC.

Finance and Investment Committee

The role of the finance and investment committee is to assist the Board in fulfilling its responsibilities with
respect to Teva’s financial and investment strategies and policies, including determining policies and guidelines
on these matters and monitoring implementation. It is also authorized to approve certain financial transactions
and review risk factors associated with management of Teva’s finances and the mitigation of such risks as well as
various other finance-related matters. At least one of the committee’s members must be qualified as a financial
and accounting expert under applicable SEC regulation and/or the Israeli Companies Law.

Corporate Responsibility Committee

The role of the corporate responsibility committee is to oversee, on behalf of the Board Teva’s;

 

(i) commitment to being a responsible corporate citizen,

 

(ii) policies and practices for complying with laws, regulations and internal procedures;

 

(iii) policies and practices regarding issues that have the potential to seriously impact Teva’s business and reputation;

 

(iv) global public policy positions; and

 

(v) community outreach.

 

A majority of committee members must be determined to be independent as defined by the applicable NYSE rules and those of the SEC. The Chairperson of the audit committee must serve as a member of the
committee.

Science and Technology Committee

Science and Technology Committee is primarily engaged in the review of Teva’s strategies with regard to its
research and development activities, major research and development projects and sourcing opportunities from
academic institutions and other parties, and brings its recommendations, when applicable, to the Board.