- Provide training to 100% of associates and confirm 95% or higher completion at any given time for the following training courses in 2021: Business Ethics, Diversity and Inclusion (including unconscious bias), Fair Housing, IT Security Awareness, Sexual Harassment, and Workplace Harassment.
- Perform internal and external compliance screening for all new vendors to confirm compliance with federal laws including the Patriot Act, The Money Laundering Control Act, and Executive Order 13224.
- Continue to evaluate the risk of climate change as part of our Enterprise Risk Management process.
- Regularly engage with key stakeholders throughout the year through meetings and participation surveys in order to understand their ESG related priorities and further improve the Company's ESG disclosures.
- Annual election of all directors
- Majority voting in uncontested director elections
- Proxy access for eligible director candidates nominated by eligible shareholders
- No shareholder rights plan (Poison Pill)
- Confidential Voting
- No material restrictions on shareholders’ right to call a special meeting
- 517 interactions with our shareholders in 2020 and early 2021, representing 84% of common stock outstanding
- Ability for shareholders to propose binding bylaw amendments
- Strong Lead Independent Director role with clearly articulated responsibilities
- Audit and Risk Management, Compensation and Management Development, Governance and Nominating Committees consist entirely of independent directors
- All directors are independent, except the Chairman and Chief Executive Officer
- Independent directors meet regularly in executive session
- Extensive board dialogue with formal processes for shareholder engagement
- Annual board and committee self-evaluations
- Annual individual director evaluation process
- Periodic continuing education for directors
- All Directors Attended at Least 75% of meetings held
- Annual advisory approval of named executive officer compensation
- Code of Business Conduct and Ethics, and Code of Ethics for Senior Financial Officers
- Stock Ownership Guidelines for Executive Officers and Directors
- Prohibition on Hedging Transactions
- Pledging Transactions Prohibited Without Prior Approval
- Policy on Recoupment of Performance-Based Incentives
- Require diverse candidates be included in the initial pool for any search for a new director or external search for a CEO
One of the primary responsibilities of the Board is to ensure that the Company has the necessary senior management talent to pursue our strategies and drive successful results. The Company’s Statement on Corporate Governance provides that the Board is responsible for appointing the CEO, and planning for their succession, as well as the succession of other executive officers of the Company. The Compensation Committee is responsible for annually reviewing the development and retention plans for the Company’s key executive officers, including the CEO; reviewing and approving a succession plan for the CEO; and ensuring development and succession plans are in place for the Company’s key executive officers reporting to the CEO. Leadership succession is reviewed continuously throughout the year.
Board Composition and Expertise
At UDR, we believe that diversity of background and perspective is an important attribute of a well-functioning Board. Collectively, the members of our Board standing for election embody a range of viewpoints, backgrounds, and expertise. The Board of Director’s continued its refreshment efforts with the addition of Diane M. Morefield in 2020 and Kevin C. Nickelberry in 2021. With these continued efforts, the Board has now added six new independent directors in the last seven years with diverse and additive skill sets. In addition, the most recent two additions have further enhanced the gender and ethnic diversity of the board to forty percent (40%).
The UDR Code of Business Conduct and Ethics cannot cover every issue that may arise but sets out basic principles to be followed by all the Company’s directors, officers, and associates. Additionally, it is expected that this Code is provided to and followed by the Company’s agents, representatives, and consultants.
Some of the topics that The Code of Business Conduct and Ethics covers include Conflicts of Interest, Insider Trading, Competition and Fair Dealing, Gifts and Entertainment, Health and Safety, and Bribery and Corruption. The Code also reiterates the Company’s commitment to equal opportunity and strict forbiddance of discrimination. Annually, the Code of Business Conduct and Ethics is acknowledged by all associates and provided to new associates during their onboarding with the Company.
Diversity and Equal Opportunities
UDR is an equal opportunity employer. We are committed to treating our associates in a nondiscriminatory manner with regard to race, ethnicity, religion, sex, sexual orientation, gender, sexual / gender identity, age, disability, pregnancy, national origin, military or veteran status, or any other characteristic protected by law. In 2020, the Company engaged an independent consultant to conduct a Company-wide DEI Organizational Assessment. This assessment included a survey sent to all associates and conducting focus groups. The findings are to be used to assist us in (1) driving new programs specifically created to strengthen our DEI efforts when hiring, (2) advancing associate training and development, compensation, and representation of underrepresented groups, and (3) helping us define new goals.
Enterprise Risk Management
Enterprise Risk Management (“ERM”) provides a proactive framework for the evaluation of threats and risks to our business and assists in the development of mitigation strategies to protect the enterprise. ERM oversight is the responsibility of the Board. Our existing ERM dashboard is reviewed by the Audit and Risk Management Committee as part of regularly scheduled meetings and is also shared with the Board as part of its regularly scheduled meetings. Our approach to ERM includes:
- Identifying risks that could materially impact our enterprise;
- Assessing risks, including impact, timing, likelihood, and trend (short and long term);
- Identifying and evaluating controls and risk mitigation to determine sufficiency; and
- Adjusting resources, processes, and strategies if necessary to reduce risk.
Within our risk universe, we have identified and incorporated climate change, including physical, transitional, and regulatory related risks as types of risks that can impact our enterprise and that are important to our stakeholders.
Enterprise Security Program
UDR has an Enterprise Security Program that provides real-time monitoring of cyber security threats. This comprehensive program monitors the health of the Company’s overall security performance including governance, associate training, risk, business continuity, application health, compliance against standards, and building management systems.
- The protection of resident data and privacy.
- Securing all business data that is generated, stored, or transmitted.
- Complying with all applicable laws and regulations.
- Educating our associates on the importance of information security and aware of the latest threat issues.
The Company has an established compliance program that is designed to help ensure business is conducted ethically in accordance with company policy. This reduces third-party risk, including fraud risk. Periodically, a due diligence review is performed of the Company’s vendors to confirm licenses, tax identification numbers, criminal, and other background searches, insurance, and that Company required standards of performance are met. This review ensures compliance with federal laws including the Patriot Act, The Money Laundering Control Act, and Executive Order 13224. All vendors must agree to comply with all applicable laws and regulations, including non-discrimination laws.
Our Internal Audit group is independent and reports directly to the Audit and Risk Management Committee of the Board of Directors. The Internal Audit group utilizes data analytics software and robotic process automation to audit and test whole populations of significant Company operational and financial transactions. The audit results are summarized and provided to senior management and the Audit and Risk Management Committee.
Our Government Affairs group was formed to track, monitor, and advise on regulatory matters that may impact our business at the local, county, state, federal, and judicial levels. Regulatory matters may include legislation such as COVID emergency measures, other housing statutes, mandated emission targets, changes to tax rules, general liability, as well as numerous other areas of interest to UDR. The group works closely with the Company’s Legal and Operations teams to ensure that UDR is considering legislative and regulatory items that may impact our business, associates, and residents in a timely manner. Regular reports on regulatory changes are provided to senior management, UDR’s operating team, and other Company leaders to help guide our operating and capital allocation strategies.