We take very seriously the responsibility that individuals and organizations have chosen to invest in our company, and we strive every day to ensure that our actions result in value for these investors. We believe that ethical business practices and good governance promotes the long-term interests of our stockholders, strengthens Board of Directors and management accountability, and improves our standing as a trusted member of the communities we serve.
Our commitment to good corporate governance is reflected in the Corporate Governance Guidelines, which describe the views and policies of our Board of Directors. Written charters for the Board’s Audit Committee, Compensation and Management Development Committee, Nominating and Corporate Governance Committee, and Investment and Finance Committee describe the responsibilities of each of these bodies. We are committed to the principles of good corporate governance and have implemented internal policies and procedures to ensure that our governance practices are best in class.
Our Board of Directors operates with transparency and integrity as it oversees and guides our corporate governance practices that align with stockholder interests.
- A substantial majority of our directors (82%) are independent;
- Each of our Audit Committee, Compensation and Management Development Committee, and Nominating and Corporate Governance Committee — is composed entirely of independent directors;
- Our Board of Directors is committed to diversity, and 36% of our directors represent gender and ethnically diverse populations;
- Our Board of Directors is led by our Chairperson, and the Chairperson position is separate from our President and CEO;
- We conduct annual Board and committee evaluations;
- Generally, our directors are not expected to serve after reaching age 75, and 91% of our directors are 65 or younger;
- We intend that no director serve more than 15 years on our Board, and our directors’ average tenure is 2.7 years as of May 2020;
- Our Board of Directors is committed to refreshment, and four of our 11 directors joined the Board since the beginning of 2018;
- Our independent directors meet regularly in executive sessions without the presence of our corporate officers or non-independent directors;
- We have instituted limits on the number of outside directorships held by our directors to prevent “overboarding”;
- We provide robust director orientation and continuing education programs;
- Our Board of Directors regularly rotates committee members; and
- Our Code of Business Conduct and Ethics applies to members of the Board.
We believe that effective corporate governance is critical to our ability to create long-term value for our stockholders. We have structured our corporate governance in ways that strive to align its interests with those of our stockholders:
- Each of our directors is subject to annual reelection (we will not classify our Board in the future without the approval of our stockholders);
- Stockholders holding at least 10% of outstanding shares have the right to call special meetings;
- Stockholders holding a majority of outstanding shares have the right to amend, alter or repeal our Bylaws, or adopt new Bylaws;
- Stockholders may act by written consent;
- We do not have a stockholder rights plan, and we will not adopt a stockholder rights plan in the future without stockholder approval;
- We have opted out of the Maryland business combination and control share acquisition statutes and cannot opt in without stockholder approval; and
- We actively engage with our stockholders, seek input, address questions and concerns, and provide perspective on the company policies and practices through our direct outreach to investors, our annual meeting of stockholders and regular detailed investor presentations.
Our fully independent Compensation and Management Development Committee oversees the executive compensation program and evaluates the program against competitive practices, legal and regulatory development and corporate governance trends and best practices.
- The majority of our executive compensation is performance-based and at-risk, tied to rigorous absolute and relative performance goals;
- We utilize a balanced mix of metrics for our annual and long-term incentive plans to measure the company’s performance;
- We have implemented a claw-back policy for long-term incentive awards to allow for the company to seek reimbursement from our senior executives;
- We do not authorize excise tax gross-ups;
- We prohibit hedging and restrict pledging or borrowing against company stock;
- We have no executive-only perquisites such as company cars, security systems or financial planning;
- None of our executives has an employment agreement; and
- We engage an independent compensation consultant that does not provide any other consulting or other services to the company to assist our Compensation and Management Development Committee with creating the executive compensation program.
Our directors and executive officers are subject to stock ownership and retention requirements, under which they are expected to own shares of our common stock equal in market value to a specified multiple of his or her annual base salary or cash retainer, as applicable:
- President and CEO: 6X base salary;
- Executive officers: 3X base salary; and
- Non-employee directors: 5X annual cash retainer for Board service.
Ethical Business Practices
We believe it is critically important to maintain a corporate culture that demands integrity and reflects our ethical values. We are committed to operating at the highest ethical level and serving as a responsible fiduciary for our stockholders. Everyone who works at or with Invitation Homes should feel confident about our high ethical standards, our honesty, and our integrity. Our daily decisions are driven by our Code of Business Conduct and Ethics, which demonstrates our commitment to be a responsible corporate citizen and a good business partner. Each day, we work hard and are committed to delivering on our company’s mission statement – “Together with you, we make a house a home.” In doing so, our actions are guided by our company’s core values: Unshakable Integrity, Genuine Care, Continuous Excellence, and Standout Citizenship. The Code helps guide us as we collaborate to accomplish our goals together, while holding ourselves individually responsible for our work and accountable for our actions.
Our Code of Business Conduct and Ethics is supported by associate conduct policies and programs and reinforced through regular associate training. We have zero tolerance in relation to illegal or unethical conduct and this is articulated in our relevant policies, including policies on conflicts of interest, gifts and entertainment, fraud, sanctions, outside activities, political contributions, and bribery and corruption. Any associate who violates the requirements of the Code, or any of our other policies, is subject to disciplinary action up to and including termination.
We have retained a third-party solution provider for automating ethics and compliance reporting. The reports are reviewed with our Audit Committee at meetings held several times a year. We have also implemented a “whistleblower” policy that allows our associates to file reports regarding any impropriety on a confidential and anonymous basis. Neither our company, the Audit Committee, nor any director, officer, employee, contractor, subcontractor or agent of the company will, directly or indirectly, discharge, demote, suspend, threaten, harass or in any manner discriminate or retaliate against any person who, in good faith, makes a report or assists in investigating a report.
We face various forms of risk in our business ranging from broad economic, housing market, and interest rate risks, to more specific factors, such as credit risk related to our residents, re-leasing of properties, and competition for properties.
Our Board of Directors believes that effective risk management involves our entire corporate governance framework. Both management and the Board have key responsibilities in managing risk throughout our company.
The Board of Directors has overall responsibility in the oversight of risk management. The Board is supported in its risk oversight function by its Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Investment and Finance Committee.
Management is responsible for identifying material risks, implementing appropriate risk management strategies, integrating risk management into our decision-making process and ensuring that information with respect to material risks is transmitted to senior executives and our Board of Directors.
Performing an annual enterprise risk evaluation by management and internal auditors ensures that we are cognizant of risks and proactively mitigate such risks. Members of the Board regularly meet with members of management, internal audit and other key personnel who advise the Board on areas of enterprise risk, the company’s risk mitigation and response strategies, and any incidents that have arisen. Our Board helps determine if any additional policies need to be enacted or any further actions need to be taken to minimize potential risks.
In 2020, we audited our current technological practices to identify areas of opportunity for better protection. In 2019 we launched a Multi-Factor Authentication (MFA) deployment, and in 2020 we logged our first complete year of this security deployment. MFA produces an extra layer of verification that adds security and helps protect our associates’ accounts.
Additionally, we launched BitLocker, a data protection feature that integrates with our Windows systems to help ensure only authorized users are accessing company information.