2015 SUSTAINABILITY REPORT

MANAGING RISK & COMPLIANCE

OVERVIEW

GRI

G4-34

G4-35

G4-38

G4-39

G4-40

G4-41

G4-51

G4-52

GOVERNANCE

BOARD OF DIRECTORS

Standing From Left To Right: Wesley G. Bush, Martin H. Nesbitt, John R. Thompson, James A. Squires, Steven F. Leer, Erskine B. Bowles, Thomas D. Bell Jr., and Amy E. Miles.

Sitting From Left To Right: Karen N. Horn, Robert A. Bradway, Charles W. Moorman, Daniel A. Carp, and Michael D. Lockhart.

wesley g. bush, 53 of McLean, Va., is chairman, chief executive officer and president of Northrop Grumman Corporation. His board service began in 2012.

Committees:
Compensation, Finance

MARTIN H. NESBITT, 52, of Chicago, Ill., is co-founder of The Vistria Group, a private equity firm. He served as managing director of Green Courte Partners LLC, a real estate investment firm, and president and chief executive officer of PRG Parking Holding LLC until 2012. His board service began in 2013.

Committees:
Audit, Finance

JOHN R. THOMPSON, 63, of Baltimore, Md., is a government relations consultant for Best Buy Co. Inc. and formerly served as senior vice president and general manager of BestBuy.com. His board service began in 2013.

Committees:
Audit, Governance and Nominating

JAMES A. SQUIRES, 53, of Norfolk, Va., is president and, effective June 1, 2015, chief executive officer of Norfolk Southern Corporation. His board service began in 2014.

STEVEN F. LEER, 62, of St. Louis, Mo., is senior advisor to the president and chief executive officer, and former executive chairman of Arch Coal, Inc., one of the nation’s largest coal producers. His board service began in 1999.

Committees:
Governance and Nominating (chair), Executive, Compensation

ERSKINE B. BOWLES, 69, of Charlotte, N.C., is a senior advisor to Carousel Capital and co-chairman of the National Commission on Fiscal Responsibility and Reform. He formerly served as president of the University of North Carolina’s 16-campus system and as chief of staff to President Bill Clinton. His board service began in 2011.

Committees:
Compensation, Finance

THOMAS D. BELL JR, 65,of Atlanta, Ga.,is chairman of Mesa Capital Partners LLC and formerly served as chairman and chief executive officer of Cousins Properties Inc. and Young and Rubicam Inc. His board service began in 2010.

Committees:
Finance (chair), Executive, Compensation

AMY E. MILES, 48, of Knoxville, Tenn., is chief executive officer and a director of Regal Entertainment Group Inc., the largest movie theater company in the U.S. Her board service began in 2014.

Committees:
Audit, Finance

KAREN N. HORN, 71, of DeLand, Fla., is a partner with Brock Capital Group and director of the National Bureau of Economic Research. She previously served as president of private client services and managing director of Marsh Inc., a subsidiary of MMC; chair and chief executive officer of Bank One; and president of the Federal Reserve Bank of Cleveland. Her board service began in 2008.

Committees:
Audit (chair), Excutive, Governance and Nominating

ROBERT A. BRADWAY, 52, of Thousand Oaks, Calif., is chairman and chief executive officer of Amgen. His board service began in 2011.

Committees:
Audit, Governance and Nominating

CHARLES W. "Wick" MOORMAN, 62, of Virginia Beach, Va., is board executive chairman and former CEO of Norfolk Southern Corporation. His board service began in 2005.

Committees:
Executive (chair)

DANIEL A. CARP, 66, of Naples, Fla., is nonexecutive chairman of Delta Air Lines, Inc., and formerly served as chairman and chief executive officer of Eastman Kodak Company. His board service began in 2006.

Committees:
Compensation (chair), Executive, Governance and Nominating

MICHAEL D. LOCKHART, 65, of Lancaster, Pa., is former chairman, president, and chief executive officer of Armstrong World Industries, Inc. His board service began in 2008.

Committees:
Audit, Finance

Governance at the Thoroughbred

As a publicly traded company, Norfolk Southern is governed by a board of directors elected by company shareholders. The board is made up of talented individuals with a diversity of backgrounds, experiences, and perspectives.

In 2014, two new members were elected to the board: Amy Miles of Knoxville, Tenn., who is CEO and a director of Regal Entertainment Group, and Jim Squires, who is Norfolk Southern’s president and became company CEO on June 1, 2015.

The board comprises 13 members, including Squires and retired CEO and Chairman Wick Moorman, the only members who are officers or employees of Norfolk Southern. Moorman became board executive chairman after Squires assumed the CEO position.

The board has five standing committees that perform oversight functions and offer guidance and recommendations to the full board on various key aspects of the corporation’s operations. The committees and a brief description of their duties:

AUDIT

This committee provides oversight of the corporation’s financial statements and reports, internal controls, and related matters. All members have accounting or related financial management expertise, as defined by the Securities and Exchange Commission.

COMPENSATION

This committee reviews and makes recommendations on compensation levels, plans, and programs for the directors, CEO, and other officers whose salaries are fixed by the board of directors.

executive

This committee, to the extent deemed appropriate and as provided by law, can act on behalf of the board as needed when the full board is not in session, including declaring a dividend at the rate of the most recent quarterly dividend approved by the board.

FINANCE

In consultation with the company’s chief financial officer, this committee develops guidelines and oversees implementation of policies concerning the corporation’s capital structure, including long-term debt and mix of long-term debt and equity, dividend policies, share repurchases, and insurance coverage. The committee also reviews and evaluates tax and treasury matters and financial returns of transactions, including the corporation’s cash flow, tax planning activities, banking relationships, and retirement plans.

GOVERNANCE AND NOMINATING

This committee recommends nominees to serve on the board of directors and also recommends individuals for the board to elect as officers of the corporation. In addition, this committee monitors legislative and public policy developments relevant to the corporation; oversees the corporation’s charitable giving; monitors the corporation’s relations with stockholders; monitors corporate governance trends and practices; and recommends procedures and processes for oversight of the corporation’s risk management program.

A Few Good Men and Women

Individuals recommended for board service by the governance and nominating committee are expected to serve the long-term interests of all of the corporation’s shareholders. At a minimum, board nominees recommended by the committee must:

  • Be of high ethical character and have personal and professional reputations consistent with the image and reputation of the corporation.
  • Have experience as senior executives of public companies or leaders of large organizations, including charitable and governmental organizations, or have other experience at a strategy or policy-setting level that would benefit the corporation.
  • Be able to represent shareholders in an objective and impartial manner.
  • Have time available to devote to board activities.

An Independent Board

Implementing rules of the New York Stock Exchange, the board of directors has adopted a policy that a majority of serving board members must be independent. That means they cannot have a material relationship with Norfolk Southern, either directly as an officer, or indirectly as a partner, stockholder, or officer of an organization that has a relationship with our company.

Under board policy, all board members serving on the audit, compensation, finance, and governance and nominating committees must be independent.

In 2014, Norfolk Southern amended governance guidelines to expand the duties of the board’s lead independent director. The change ensures that the lead independent director approves board meeting agendas and materials, monitors the flow of information between committees and the full board, is kept apprised of inquiries from and correspondence with stockholders, is available to meet with major stockholders, and interviews board candidates as appropriate.

Want more information?

Detailed information about the railroad’s governance structure and board can be found in the Investors section on the company’s website.