As strong corporate governance is a key driver of long-term stockholder value, our Board of Directors has implemented
a robust structure and leading practices to oversee the management of our business and assure that our stockholders’
interests are being served.
Our Board’s approach to corporate governance aligns with the principles of the Investor Stewardship Group, which is a
coalition of some of the world’s largest investors and asset managers, including several of our top stockholders, as
summarized below.
Investor Stewardship Group
Corporate Governance Principles
Principle
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What We Do
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The Board is unclassified, and directors stand for
election annually.
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Directors must receive a majority of votes cast for
their election in an uncontested election.
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Stockholders approved measures with potential
“anti-takeover” effects to protect our valuable
deferred tax assets.
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Stockholders may communicate with us and the Board.
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We proactively engage with our stockholders year-round
on environmental, social and governance (ESG) matters,
our business strategy, performance and outlook. Matters
raised in these engagements are actively discussed with
directors as relevant.
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Directors have extensive and relevant experience and
skills.
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All directors, except our President and Chief Executive
Officer, are independent.
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42% of our directors are women or ethnic minorities.
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Our Board committees are comprised of only independent
directors.
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Directors are highly engaged, and average Board meeting
attendance during 2021 was 96%; average committee
meeting attendance was 88% or higher.
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Directors can access all levels of our organization and
outside advisors for information about our business and
their Board roles.
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In 2020, with multiple directors then approaching
retirement age, the Board initiated a proactive plan to
refresh its membership that resulted in two new
directors joining the Board in 2020 and two additional
directors being elected in 2021.
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In 2021, our Say-on-Pay proposal received 85% support
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Management compensation is designed to advance our
long-term strategic goals, with significant emphasis
placed on at-risk, performance-based pay. Information
regarding our compensation plans is provided in our
2022 Proxy Statement.
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The Board oversees our sustainability program and initiatives as part of our overall business strategy and has
delegated certain risk oversight responsibilities to its committees. The Audit and Compliance Committee assesses
environmental sustainability; the Management Development and Compensation Committee evaluates workforce diversity
and inclusion, and health and safety matters; and the Nominating and Corporate Governance Committee has oversight of
all governance matters. Two directors – Arthur R. Collins and Dorene C. Dominguez – are the Board’s
liaisons to management on ESG.
In addition to Board-level governance, we have a number of internal and external structures in place that are
specifically tasked with advancing our sustainability strategies and actions throughout our organization:
National Advisory Board (NAB)
Comprised of nationally recognized leaders across diverse
disciplines that provide an independent perspective on our sustainability initiatives and progress, which help shape
our sustainability priorities, reporting and our approach to stakeholder engagement. Our NAB meets twice a year and
includes participation from our Chairman, President and Chief Executive Officer and Senior Vice President for
Sustainability. We also consult with our NAB members throughout the year on specific issues and emerging topics.
Sustainability Leadership Team
A group of high-level KB Home executives, led by one of our
Executive Vice President and Co-Chief Operating Officers and our Senior Vice President for Sustainability, including
select Division Presidents, convenes on a regular basis to discuss sustainability strategies, craft, and refine
Company policies and initiatives, and create buy-in with leaders across all of our operating regions and major
functional departments.
ESG Steering Committee
An internal group of senior executives across multiple disciplines, led
by our Senior Vice President of Investor Relations, interacts with key external stakeholders, raising our ESG
profile across the Company and enhancing the transparency and disclosure of our initiatives.
Environmental Management System (EMS)
We also have established an environmental management system, as defined by the U.S. Environmental Protection Agency, designed to facilitate, and advance a continual cycle of planning, implementing, measuring, and evaluating of our greenhouse gas emission reduction efforts. Details about our EMS is available in our 2020 Sustainability Report.