Corporate Governance Highlights

The board and management continually monitor applicable requirements and emerging practices and trends in corporate governance, from sources including Sarbanes-Oxley and the NYSE, and reflect those requirements, practices and trends in Freddie Mac's corporate governance processes. Some highlights of Freddie Mac's practices include:

The board of directors has adopted and published Corporate Governance Guidelines [PDF 52K], including board independence criteria, which satisfy all NYSE and SEC requirements.
Freddie Mac and its board are working with Professor Charles M. Elson, an acknowledged expert in corporate governance, to strengthen the company's corporate governance practices and policies.
Freddie Mac has committed to separate the positions of chairman and CEO within a reasonable period of time.
The board has an Audit Committee, a Compensation and Human Resources Committee and a Governance, Nominating and Risk Oversight Committee that are fully independent under Sarbanes-Oxley and the NYSE corporate governance rules. The charters of those committees satisfy the requirements of the NYSE corporate governance rules and Sarbanes-Oxley.
The board has committed to meet at least eight times each year and continues to meet regularly in executive session without management present.
The chair of the board's Audit Committee qualifies as an "audit committee financial expert" under SEC standards.
The board has restructured its standing committees and revised their respective charters.
The board's Governance, Nominating and Risk Oversight Committee, consisting of the lead director and the chairs of all the other standing board committees, is responsible for corporate governance matters, for recommendations concerning candidates for election to the board and the independence of board members and for other matters assigned to it by the board.
The board continues to use an outside consultant to benchmark senior management compensation and its own compensation against a group of companies that are either in a similar line of business or are otherwise relevant for purposes of recruiting individuals with relevant skills and capabilities.
Stock options are expensed on Freddie Mac's financial statements.
All equity compensation plans have been approved by Freddie Mac shareholders.
The board has strengthened its Codes of Conduct for both employees and members of the board to ensure that they meet the highest standards of today's corporate governance and are in full compliance with the applicable requirements of Sarbanes-Oxley and the NYSE corporate governance rules. We have restructured the employee Code of Conduct to make it more readable and accessible.
The Audit Committee has adopted a policy governing Freddie Mac’s employment of current and former employees of Freddie Mac’s independent auditors.

In 2003 and 2004, Freddie Mac conducted a training program on Sarbanes-Oxley and the Code of Conduct for its employees. Later in 2004 all employees were required to complete an on-line course addressing business ethics, and in 2005 and 2006, employees were required to complete on-line courses addressing the Freddie Mac Code of Conduct, careful communications and Sarbanes-Oxley. New employees must complete these courses within a short time of their arrival.

Management has implemented a third-party complaint "hotline" to permit employees to submit complaints on a confidential and/or anonymous basis, as required by Sarbanes-Oxley. The Audit Committee has adopted a corporate policy [PDF 62K] with procedures for treating complaints by employees and other parties, including "whistleblower protection."
Management has issued a corporate policy specifying procedures to ensure that Freddie Mac's in-house attorneys comply with the reporting requirements of Sarbanes-Oxley.
Reports of Section 16 stock transactions are promptly filed and posted on Freddie Mac's website, along with Freddie Mac earnings releases, in accordance with regulations applicable to registered companies. Section 16 reports will be submitted on EDGAR and earnings reports filed on Form 8-K when Freddie Mac completes its voluntary registration with the SEC.