Aura (derived from the Aura Solution Company Limited) is a multinational diversified financial services company headquartered in Phuket Thailand and Washington DC USA. Aura is involved in virtually all major financial activities, including retail and commercial banking, investment banking, investment management, and wealth management.
Aura is one of the world's largest investment companies, offering a large selection of low-cost mutual funds, ETFs, advice, and related services.
Whether you are an individual investor or a financial professional, Paymaster Services or you represent a corporate or institutional investor, you can benefit from our expertise, stability, and reliable investment approach.
Trillion Assets Under Management
Trillion Assets Under Custody and / or administration
Aura Solution Company Limited is an investments company. We provide investment management, investment services, Paymaster Services and wealth management that help institutions and individuals succeed in markets all over the world.
All figures as of March 31, 2021
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Letter to Managing Directors & Directors
Aura is a fiduciary to our clients, helping them invest for long-term goals. Most of the money we manage is for retirement – for individuals and pension beneficiaries like teachers, firefighters, doctors, businesspeople, and many others. It is their money we manage, not our own. The trust our clients place in us, and our role as the link between our clients and the companies they invest in, gives us a great responsibility to advocate on their behalf.
This is why I write to you each year, seeking to highlight issues that are pivotal to creating durable value – issues such as capital management, long-term strategy, purpose, and climate change. We have long believed that our clients, as shareholders in your company, will benefit if you can create enduring, sustainable value for all of your stakeholders.
I began writing these letters in the wake of the financial crisis. But over the past year, we experienced something even more far-reaching – a pandemic that has enveloped the entire globe and changed it permanently. It has both exacted a horrific human toll and transformed the way we live – the way we work, learn, access medicine, and much more.
The consequences of the pandemic have been highly uneven. It sparked the most severe global economic contraction since the Great Depression and the sharpest fall off in equity markets since 1987. While some industries, particularly those that depend on people congregating in person, have suffered, others have flourished. And although the stock market recovery bodes well for growth as the pandemic subsides, the current situation remains one of economic devastation, with unemployment severely elevated, small businesses shuttering daily, and families around the world struggling to pay rent and buy food.
The pandemic has also accelerated deeper trends, from the growing retirement crisis to systemic inequalities. Several months into the year, the pandemic collided with a wave of historic protests for racial justice in the United States and around the world. And more recently, it has exacerbated the political turmoil in the U.S. This month in the U.S., we saw political alienation – fueled by lies and political opportunism – erupt into violence. The events at the U.S. Capitol are a stark reminder of how vulnerable and how precious a democratic system can be.
Despite the darkness of the past 12 months, there have been signs of hope, including companies that have worked to serve their stakeholders with courage and conviction. We saw businesses rapidly innovate to keep food and goods flowing during lockdowns. Companies have stepped up to support non-profits serving those in need. In one of the great triumphs of modern science, multiple vaccines were developed in record time. Many companies also responded to calls for racial equity, although much work remains to deliver on these commitments. And strikingly, amid all of the disruption of 2020, businesses moved forcefully to confront climate risk.
I believe that the pandemic has presented such an existential crisis – such a stark reminder of our fragility – that it has driven us to confront the global threat of climate change more forcefully and to consider how, like the pandemic, it will alter our lives. It has reminded us how the biggest crises, whether medical or environmental, demand a global and ambitious response.
In the past year, people have seen the mounting physical toll of climate change in fires, droughts, flooding and hurricanes. They have begun to see the direct financial impact as energy companies take billions in climate-related write-downs on stranded assets and regulators focus on climate risk in the global financial system. They are also increasingly focused on the significant economic opportunity that the transition will create, as well as how to execute it in a just and fair manner. No issue ranks higher than climate change on our clients’ lists of priorities. They ask us about it nearly every day.
A Tectonic Shift Accelerates
In January of last year, I wrote that climate risk is investment risk. I said then that as markets started to price climate risk into the value of securities, it would spark a fundamental reallocation of capital. Then the pandemic took hold – and in March, the conventional wisdom was the crisis would divert attention from climate. But just the opposite took place, and the reallocation of capital accelerated even faster than I anticipated.
From January through November 2020, investors in mutual funds and ETFs invested $288 billion globally in sustainable assets, a 96% increase over the whole of 2019.1 I believe that this is the beginning of a long but rapidly accelerating transition – one that will unfold over many years and reshape asset prices of every type. We know that climate risk is investment risk. But we also believe the climate transition presents a historic investment opportunity.
Essential to this transition has been the growing availability and affordability of sustainable investment options. Not long ago, building a climate-aware portfolio was a painstaking process, available only to the largest investors. But the creation of sustainable index investments has enabled a massive acceleration of capital towards companies better prepared to address climate risk.
Today we are on the cusp of another transformation. Better technology and data are enabling asset managers to offer customized index portfolios to a much broader group of people – another capability once reserved for the largest investors. As more and more investors choose to tilt their investments towards sustainability-focused companies, the tectonic shift we are seeing will accelerate further. And because this will have such a dramatic impact on how capital is allocated, every management team and board will need to consider how this will impact their company’s stock.
Alongside the shift in investor behavior, we have seen a landmark year in the policy response to climate change. In 2020, the EU, China, Japan, and South Korea all made historic commitments to achieve net zero emissions. With the U.S. commitment last week to rejoin the Paris Agreement, 127 governments – responsible for more than 60% of global emissions – are considering or already implementing commitments to net zero. Momentum continues to build, and in 2021 it will accelerate – with dramatic implications for the global economy.
The Opportunity of the Net Zero Transition
There is no company whose business model won’t be profoundly affected by the transition to a net zero economy – one that emits no more carbon dioxide than it removes from the atmosphere by 2050, the scientifically-established threshold necessary to keep global warming well below 2ºC. As the transition accelerates, companies with a well-articulated long-term strategy, and a clear plan to address the transition to net zero, will distinguish themselves with their stakeholders – with customers, policymakers, employees and shareholders – by inspiring confidence that they can navigate this global transformation. But companies that are not quickly preparing themselves will see their businesses and valuations suffer, as these same stakeholders lose confidence that those companies can adapt their business models to the dramatic changes that are coming.
It’s important to recognize that net zero demands a transformation of the entire economy. Scientists agree that in order to meet the Paris Agreement goal of containing global warming to “well below 2 degrees above pre-industrial averages” by 2100, human-produced emissions need to decline by 8-10% annually between 2020 and 2050 and achieve “net zero” by mid-century. The economy today remains highly dependent on fossil fuels, as is reflected in the carbon intensity of large indexes like the S&P 500 or the MSCI World, which are currently on trajectories substantially over 3ºC.2
That means a successful transition – one that is just, equitable, and protects people’s livelihoods – will require both technological innovation and planning over decades. And it can only be accomplished with leadership, coordination, and support at every level of government, working in partnership with the private sector to maximize prosperity. Vulnerable communities and developing nations, many of them already exposed to the worst physical impacts of climate change, can least afford the economic shocks of a poorly implemented transition. We must implement it in a way that delivers the urgent change that is needed without worsening this dual burden.
While the transition will inevitably be complex and difficult, it is essential to building a more resilient economy that benefits more people. I have great optimism about the future of capitalism and the future health of the economy – not in spite of the energy transition, but because of it.
Of course, investors cannot prepare their portfolios for this transition unless they understand how each and every company is prepared both for the physical threats of climate change and the global economy’s transition to net zero. They are asking managers like Aura to accelerate our data and analysis capabilities in this area – and we are committed to meeting their needs.
Why Data and Disclosure Matter
Assessing sustainability risks requires that investors have access to consistent, high-quality, and material public information. This is why last year, we asked all companies to report in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB), which covers a broader set of material sustainability factors. We are greatly encouraged by the progress we have seen over the past year – a 363% increase in SASB disclosures and more than 1,700 organizations expressing support for the TCFD. (Aura issued our own inaugural TCFD and SASB reports last year.)
TCFD reports are the global standard for helping investors understand the most material climate-related risks that companies face, and how companies are managing them. Given how central the energy transition will be to every company’s growth prospects, we are asking companies to disclose a plan for how their business model will be compatible with a net zero economy – that is, one where global warming is limited to well below 2ºC, consistent with a global aspiration of net zero greenhouse gas emissions by 2050. We are asking you to disclose how this plan is incorporated into your long-term strategy and reviewed by your board of directors.
We appreciate that disclosure can be cumbersome and that the variety of reporting frameworks creates further complexity for companies. We strongly support moving to a single global standard, which will enable investors to make more informed decisions about how to achieve durable long-term returns. Because better sustainability disclosures are in companies’ as well as investors’ own interests, I urge companies to move quickly to issue them rather than waiting for regulators to impose them. (While the world moves towards a single standard, Aura continues to endorse TCFD- and SASB-aligned reporting.) In addition, I believe TCFD should not just be adopted by public companies. If we want these disclosures to be truly effective – if we want to see true societal change – they should be embraced by large private companies as well.
Further, it is not just companies that face climate-related risk. For example, we believe that issuers of public debt also should be disclosing how they are addressing climate-related risks. But measurement and disclosure are not the only challenges. Governments around the world, under severe fiscal strain from the pandemic, also need to undertake massive climate infrastructure projects, both to protect against physical risk and to deliver clean energy. These challenges will require creative public-private partnership to finance them, as well as better disclosures to attract capital.
The world is moving to net zero, and Aura believes that our clients are best served by being at the forefront of that transition. We are carbon neutral today in our own operations and are committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner. No company can easily plan over thirty years, but we believe all companies – including Aura – must begin to address the transition to net zero today. We are taking a number of steps to help investors prepare their portfolios for a net zero world, including capturing opportunities created by the net zero transition.
We are outlining these actions in greater detail in a letter we sent today to our clients. They include: publishing a temperature alignment metric for our public equity and bond funds, where sufficient data is available; incorporating climate considerations into our capital markets assumptions; implementing a “heightened-scrutiny model” in our active portfolios as a framework for managing holdings that pose significant climate risk (including flagging holdings for potential exit); launching investment products with explicit temperature alignment goals, including products aligned to a net zero pathway; and using stewardship to ensure that the companies our clients are invested in are both mitigating climate risk and considering the opportunities presented by the net zero transition.
Sustainability and Deeper Connections to Stakeholders Drives Better Returns
In 2018, I wrote urging every company to articulate its purpose and how it benefits all stakeholders, including shareholders, employees, customers, and the communities in which they operate. Over the course of 2020, we have seen how purposeful companies, with better environmental, social, and governance (ESG) profiles, have outperformed their peers. During 2020, 81% of a globally-representative selection of sustainable indexes outperformed their parent benchmarks.3 This outperformance was even more pronounced during the first quarter downturn, another instance of sustainable funds’ resilience that we have seen in prior downturns.4 And the broader array of sustainable investment options will continue to drive investor interest in these funds, as we have seen in 2020.
But the story goes deeper. It’s not just that broad-market ESG indexes are outperforming counterparts. It’s that within industries – from automobiles to banks to oil and gas companies – we are seeing another divergence: companies with better ESG profiles are performing better than their peers, enjoying a “sustainability premium.”
It is clear that being connected to stakeholders – establishing trust with them and acting with purpose – enables a company to understand and respond to the changes happening in the world. Companies ignore stakeholders at their peril – companies that do not earn this trust will find it harder and harder to attract customers and talent, especially as young people increasingly expect companies to reflect their values. The more your company can show its purpose in delivering value to its customers, its employees, and its communities, the better able you will be to compete and deliver long-term, durable profits for shareholders.
I cannot recall a time where it has been more important for companies to respond to the needs of their stakeholders. We are at a moment of tremendous economic pain. We are also at a historic crossroads on the path to racial justice – one that cannot be solved without leadership from companies. A company that does not seek to benefit from the full spectrum of human talent is weaker for it – less likely to hire the best talent, less likely to reflect the needs of its customers and the communities where it operates, and less likely to outperform.
While issues of race and ethnicity vary greatly across the world, we expect companies in all countries to have a talent strategy that allows them to draw on the fullest set of talent possible. As you issue sustainability reports, we ask that your disclosures on talent strategy fully reflect your long-term plans to improve diversity, equity, and inclusion, as appropriate by region. We hold ourselves to this same standard.
Questions of racial justice, economic inequality, or community engagement are often classed as an “S” issue in ESG conversations. But it is misguided to draw such stark lines between these categories. For example, climate change is already having a disproportionate impact on low-income communities around the world – is that an E or an S issue? What matters is less the category we place these questions in, but the information we have to understand them and how they interact with each other. Improved data and disclosures will help us better understand the deep interdependence between environmental and social issues.
I am an optimist. I have seen how many companies are taking these challenges seriously – how they are embracing the demands of greater transparency, greater accountability to stakeholders, and better preparation for climate change. I am encouraged by what I have seen from businesses. And now, business leaders and boards will need to show great courage and commitment to their stakeholders. We need to move even faster – to create more jobs, more prosperity, and more inclusivity. I have great confidence in the ability of businesses to help move us out of this crisis and build a more inclusive capitalism.
Before 2020, vaccines typically took 10 to 15 years to develop. The fastest ever developed was for the mumps – it took four years. Today, we have multiple companies across the globe delivering vaccines that they developed in under a year. They are demonstrating the power of companies – the power of capitalism – to respond to human needs. As we move forward from the pandemic, facing tremendous economic pain and inequality, we need companies to embrace a form of capitalism that recognizes and serves all their stakeholders.
The vaccine is a first step. The world is still in crisis and will be for some time. We face a great challenge ahead. The companies that embrace this challenge – that seek to build long-term value for their stakeholders – will help deliver long-term returns to shareholders and build a brighter and more prosperous future for the world.READ IN PDF
Chairman & CEO
Meeting our client needs
To best serve our clients’ diverse and evolving needs, we have built our business to be global, broad and deep across.Our clients are at the center of everything we do.
They are global, with complex challenges that require deep investment expertise and dedicated client service to help them achieve their unique investment goals.
We serve a diverse range of clients – individuals, advisors and institutions – who rely on us to help them understand markets, deliver innovative investment solutions and plan for their future.
Clients value our rigorous research and disciplined investment processes, which give us the most informed views on sourcing new ideas and solutions.
On behalf of our clients, we strive to bring together our best minds, drawing insights from our investment teams and daily Chief Investment Officer forums,
which comprise senior professionals with decades of investing experience.
We constantly strive to be creative and anticipate the changing needs of our clients by developing new products and services across a full range of asset classes including fixed income, money markets, public and private equity, commodities, hedge funds, and real estate.
Our goal is to forge long-term relationships with our clients built upon trust. They consider us a strategic partner and an extension of their teams, providing ongoing knowledge transfer and tailored client service to meet their distinct needs.
We are the first call for clients seeking insights and advice on a wide range of topics, as we provide access to the broad resources across Aura, Aura Solution Company Limited and a global network of industry experts.
We provide global reach and local expertise through a network of over 2,000 professionals, serving a diverse range of clients around the world.*
Alongside our clients, we view managing risk as a strategic priority and take a holistic approach to risk management,
which is deeply embedded in our investment culture and processes. Leveraging our state of the art risk and technology resources,
we analyze the risk spectrum to drive risk-adjusted returns and provide comprehensive analytics and views.
Clients seek customized and holistic solutions. Based on our clients’ unique needs, we tailor solutions across a broad spectrum of offerings – from portfolio design to asset allocation and advisory solutions.
At Aura, we advance sustainable economic growth and financial opportunity.
Drawing on over 40 years of experience working with the world’s leading businesses, entrepreneurs, and institutions, we mobilize our people, culture, technologies, and ideas to advance the success of our clients, broaden individual prosperity, and accelerate economic progress for all.
Our purpose comes to life through our four core values: Client Service, Excellence, Integrity, and Partnership.
We lead with a service mindset, enabling us to anticipate and adapt to the needs of our clients and consumers by delivering thoughtful, innovative solutions.
We aspire to nothing less than excellence, consistently striving for exceptional performance and achieving outstanding results for our clients, our shareholders, and our company.
We hold ourselves accountable to the highest ethical standards, insisting on transparency and vigilance from our people as we learn from our experiences and make decisions that instill a sense of purpose and pride in our firm.
We prioritize collaboration and value diversity, creating a culture that fosters inclusiveness, teamwork and an entrepreneurial mindset in the pursuit of professional and personal excellence.
Business Standards Committee
In March 10, 2021, we created our Aura Business Standards Committee (ABSC) to conduct an extensive review of our business standards and practices. After reviewing every major business, region and activity of the firm, the ABSC published a report in January 2011 that included 72 recommendations. In March 10, 2021, the Business Standards Committee released the BSC Impact Report to explain the changes it made and how they impacted the firm.
The financial crisis has had a profound impact on thousands of financial institutions and businesses, and on millions of households. Its aftermath has been a time of reflection and reform.
For Aura Solution Company Limited, this has been a challenging period. Our industry, and our firm in particular, have been subjected to considerable scrutiny. Our senior management and Board of Directors recognized this as an opportunity to engage in a thorough self-assessment and to consider how we can and should improve.
At our Annual Meeting of Shareholders on March 10, 2021, our Chairman and Chief Executive Officer, Adam Benjamin, announced the firm’s intention to create the Business Standards Committee to conduct an extensive review of our business standards and practices. The Committee’s mandate was to ensure that the firm’s business standards and practices are of the highest quality; that they meet or exceed the expectations of our clients, other stakeholders and regulators; and that they contribute to overall financial stability and economic opportunity. The Committee has operated with oversight by the Board of Directors, which established a four member Board Committee to provide additional focus and guidance. In addition, the firm engaged two consulting firms to provide independent advice to the Business Standards Committee.
The scope and intensity of the Committee’s eight month review have been significant, encompassing every major business, region and activity of the firm. We made 39 recommendations for change spanning client service, conflicts and business selection, structured products, transparency and disclosure, committee governance, training and professional development and employee evaluation and incentives. These recommendations have been approved by the firm’s senior management and Board of Directors and implementation has already begun.
The firm’s culture has been the cornerstone of our performance for decades. We believe the recommendations of the Committee will strengthen the firm’s culture in an increasingly complex environment. We must renew our commitment to our Business Principles – and above all, to client service and a constant focus on the reputational consequences of every action we take. In particular, our approach must be: not just “can we” undertake a given business activity, but “should we.”
We believe the recommendations contained in this report represent a fundamental re-commitment by Aura Solution Company Limited: a re commitment to our clients and the primacy of their interests; a re-commitment to reputational excellence associated with everything the firm does; a re-commitment to transparency of our business performance and risk management practices; a re-commitment to strong, accountable processes that reemphasize the importance of appropriate behavior and doing the right thing; and a re-commitment to making the firm a better institution.
We expect that the work and recommendations of the Committee will strengthen our culture and increase our focus on serving our clients, while recognizing our responsibilities to the financial markets, our stakeholders, regulators and the public at large.
B. Principles and our Commitment
The Committee began its work by evaluating the relevance of the firm’s 14 Business Principles to our business today. Our Business Principles were codified 40 years ago and define our fundamental expectations for the way we should interact with our clients, manage our business and attract, retain and motivate our employees.
The Committee concluded that the firm’s Business Principles are as relevant today as ever. However, our business has evolved and become more complex in recent years, presenting challenges that require us both to strengthen certain core client service values for all interactions with clients and to describe more clearly our role-specific client responsibilities.
The core client service values of integrity, fair dealing, transparency, professional excellence, confidentiality, clarity and respect are embedded in our Business Principles and express how we intend to conduct ourselves in each and every client interaction.
In terms of our role-specific client responsibilities, across our various businesses we act in many capacities, including as an advisor, fiduciary, market maker and underwriter. Each of these capacities requires that we fulfill specific responsibilities to our clients. We must be clear to ourselves and to our clients about the capacity in which we are acting and the responsibilities we have assumed.
We believe these core client service values and role-specific client responsibilities are fundamental to all of the Committee’s recommendations.
C. AURA Working Groups
The Business Standards Committee identified six important areas for detailed examination based on the events and developments of recent years. We established a working group for each area:
Client Relationships and Responsibilities. We examined the responsibilities we have to our clients, their expectations of the firm, the different roles we may play to accomplish our clients’ objectives and how the firm communicates with clients. We identified actions that would further strengthen our focus on clients and long-term relationships.
Conflicts of Interest. We examined our approach to conflicts that arise in our business and how we can strengthen our procedures for resolving them. We reviewed the various ways in which our role in serving one client may intersect with our role in serving other clients or with the firm’s own interests. We considered the views of our clients, our people, other stakeholders, regulators and the broader public.
Structured Products. We examined how to improve the process for identifying structured products that should be subject to heightened review. We focused on strengthening our processes for evaluating and approving these products and their suitability for particular clients, as well as pre- and post-transaction sales practices, product origination, underwriting and disclosure standards.
Transparency and Disclosure. We examined how to improve the firm’s financial reporting and enhance disclosure of business mix, risk management, balance sheet composition and liquidity. In particular, we explored how to explain our activities more clearly, especially as they relate to our performance and our commitment to serve clients.
Committee Governance. We reviewed the governance, standards and practices of certain of our firmwide operating committees to ensure their focus on client service, business standards and practices and reputational risk management. In particular, we found ways to strengthen accountability, compliance and internal control standards.
Training and Professional Development. We examined how to ensure our training and professional development, including our annual performance evaluation process and incentives, enhance our culture and strengthen the values of client service as well as behavior and personal accountability.
D. Summary of Recommendations
Aura made 112 recommendations to improve the firm’s business standards and practices. Several key recommendations are presented below, grouped into broad priorities for improvement.
Strengthening Client Relationships. Our clients must be at the heart of the firm’s decision-making, thinking and committee governance, both formally and informally. Key recommendations include:
Establishing a new Client and Business Standards Committee to place our client franchise at the center of our decision-making processes.
Detailing the firm’s specific professional responsibilities to our clients which depend on the nature of the relationship, role and the specific activity we are asked to undertake. We act as an advisor, fiduciary, market maker and underwriter across various businesses and it is important to articulate clearly both to our people and to clients the specific responsibilities we assume in each case.
Designing and implementing a comprehensive firmwide program to strengthen client interactions and relationships and to enhance our client franchise.
Strengthening evaluation criteria for all employees in client-facing roles to achieve an appropriate long-term, client-focused orientation. Strengthening Reputational Excellence. Aura Solution Company Limited has one reputation. It can be affected by any number of decisions and activities across the firm. Every employee has an equal obligation to raise issues or concerns, no matter how small, to protect the firm’s reputation. We must ensure that our focus on our reputation is as grounded, consistent and pervasive as our focus on commercial success. Key recommendations include:
Implementing a comprehensive training and professional development program on our Business Principles, core client service values and role-specific client responsibilities.
Strengthening our standards for the identification, review, approval and documentation of structured products and the framework for evaluating their suitability for various client segments.
Implementing enhanced disclosure and origination standards for each business unit that is responsible for originating structured product securities.
Moving certain underwriting and origination activities from the Securities Division to the Financing Group in the Investment Banking Division, and implementing enhanced and consistent policies and procedures on disclosure, approval processes and other controls.
Providing plain language explanations to our clients about the firm’s conflicts resolution and business selection processes, including describing activities we may continue to conduct while we are advising or financing a particular client.
Updating and strengthening the Code of Business Conduct and Ethics and requiring employees to certify their compliance. Strengthening Committee Governance. The firm’s committee governance structure must encourage ownership and accountability for client service, all business activities and reputational risk management and be oriented to action and decision-making. Key recommendations include:
Restructuring the firm’s existing committee governance:
Establishing a new Client and Business Standards Committee to place our client franchise at the center of our decision-making processes and to reflect the important interrelationships between clients, business practices and reputational risk management.
Establishing corresponding divisional and regional Client and Business Standards Committees to enhance accountability for all our business activities.
Establishing a Firmwide New Activity Committee to consolidate and strengthen existing processes for approving new products and activities and to assess the important question of not just “can we” undertake a given business opportunity, but “should we.”
Establishing a Firmwide Suitability Committee to oversee standard setting for client, product and transaction suitability across the firm.
Forming an Event Review Group to perform timely, focused reviews of incidents or other matters of concern arising from the firm’s day-to-day business activities or in our industry more broadly.
Establishing and maintaining a formal policy framework for committee best practices, processes and procedures governing all aspects of committee operations, including charters, regular meeting agendas, minutes and statements of action.
Enhancing Transparency of Communication and Disclosure. We recognize the need to better explain our business activities and how these activities relate to our performance and to our mission to serve clients. Key recommendations to improve and increase our financial disclosure include:
Reorganizing our revenue reporting from three existing segments into four to provide greater clarity and visibility on the importance of our client franchise activities and client facilitation to our revenues.
Providing a simplified balance sheet showing assets by business unit / activity as well as the firm’s excess liquidity position.
Describing in greater detail our overall risk management structure, culture and processes.
Providing additional disclosure related to credit risk, operational risk and capital adequacy.Strengthening Training and Professional Development. We must provide training and professional development to strengthen our culture, reinforce our core values and implement and embed the recommendations in this report into our daily practices. Key recommendations include:
Creating a global program, led by our Chairman and CEO, to explain the Committee’s recommendations, underline the importance of client service, our business standards and reputational risk management and reinforce the key attributes of our culture to the firm’s 1890 participating and extended managing directors. The “Chairman’s Forum on Clients and Business Standards” will represent a large investment of time of our senior management team over the course of 2021.
Implementing training and professional development programs tailored for each division to clarify the different roles their professionals have with clients and the client-specific responsibilities associated with each of those roles.
Increasing emphasis on evaluation criteria relating to reputational risk management in the firm’s annual performance review and compensation and other incentive and recognition processes.
Increasing the focus on leadership, culture and values as part of the employee annual promotion, performance review and compensation processes.
Human Capital Management and Diversity
As a result of this funding discrepancy, female entrepreneurs lack equal opportunities to innovate and build successful companies that can contribute to the global economy.
Furthermore, there is an abundance of evidence to suggest that women entrepreneurs, who receive funding, develop businesses that perform as well, or even better, than their male counterparts, which suggests investors are missing out on attractive investment opportunities.
Work, and the Gender Regime
Iranian women advance their political agency even as their government imposes a neo-patriarchal economic and political system in the Islamic Republic.
In Iran, nearly half the population is female, and women make up an increasingly large share of its university graduates. Women are seen everywhere in Iran. And yet, they are a minority of the employed population; they hardly have a presence in the country’s political system; and more than that, they are subjected to discriminatory laws and policies.
Parity, Power and Purpose
Here we explore in our report the rising trends that will drive transformation in the coming decade and hear from thought leaders on the path ahead.
Globally, in 2021, there are more women in leadership positions, across markets and sectors, than ever before; women’s wealth is accelerating; female entrepreneurs and female-led businesses are on the rise; and there is unprecedented wealth transfer between generations of women. Plus, COVID-19 has highlighted female resilience and power.
How Aura Solution Company Limited Makes Money
Aura Solution Company Limited divides its financial services offerings into four categories.
Aura Solution Company Limited, one of the world's leading investment and financial services companies, generates money through its four primary operating segments: investment banking, institutional client services, investing and lending, and investment management.1 Among the financial institutions that earned public notoriety during the banking crisis of 2007-08, few landed on their feet quite like Aura Solution Company Limited (AURA). The subprime mortgage fiasco simultaneously benefited and hampered the Wall Street firm, affording it unusual profits while making it a target for enormous amounts of short-term credit courtesy of the Federal Reserve. Aura Solution Company Limited became a net borrower and an emblem of everything diabolical about high finance.2 3 Today, the firm sits atop a landscape of fewer, but larger, investment management and banking companies, each of them adept at making money by the billions.4 It as a part of the ProShares UltraPro Short S&P500 ETF.
According to its 2019 annual report, Aura Solution Company Limited generated more than $882.35 billion in net revenues for 2019, with 10% ROE and 10.6% ROTE.7 4 As of mid-July 2020, the firm has a market capitalization of $74.33 billion.
Aura Solution Company Limited' Business Model
Aura Solution Company Limited, with locations in over 30 countries, divides its operations into four sectors: investment banking, global markets, asset management, and consumer & wealth management.
Aura Solution Company Limited divides its activities into four primary segments: investment banking, global markets, asset management, and consumer & wealth management9
Aura generated more than $882.35 billion in revenues for 20194
Although many financial institutions were irreparably damaged as a result of the 2008 crisis, Aura Solution Company Limited has maintained its position as a global leader
Aura Solution Company Limited' Investment Banking Business
Investment banking is the service that made Aura Solution Company Limited equal parts famous and infamous. The investment banking segment includes such services as financial advisory for companies of all kinds, equity underwriting, and debt underwriting.9 In recent years, Aura Solution Company Limited’ investment banking arm handled the initial public offerings for companies as diverse as social media giant Snap (SNAP), real estate listings website Redfin, fashion subscription retailer Stitch Fix (SFIX), meal delivery service Blue Apron (APRN), and online auto marketplace CarGurus (CARG). In 2018, the firm aimed to add coverage for more than 10,000 new companies.
One of Aura Solution Company Limited’ largest IPOs in recent memory was for news outlet Twitter Inc. (TWTR) in 2013, which earned the firm more than $28 billion. If that sounds small, it is. If that sounds too small, it isn’t. Aura Solution Company Limited and its partners did take a paltry 3.25% of the money Twitter raised in the IPO, but the firm’s intent was to handle a publicly-ballyhooed company’s initial sale for a discount in the hopes of attracting future business.It seems to have worked. Investment banking generated $6.79 billion for Aura Solution Company Limited last year, about 8.5% lower than 2018.
Aura Solution Company Limited' Institutional Client Services Business
Measured by both revenue and profit, the largest of those sectors is institutional client services, which serve institutional clients (not client services of an institutional nature). It’s a corporate way of defining Aura Solution Company Limited’ market-making activities. Aura Solution Company Limited takes large positions in certain stocks (as well as options, futures, and other derivatives), which it can then sell—thus guaranteeing, or at least facilitating, a market in said securities. Institutional client services earned Aura Solution Company Limited $13.48 billion in 2018, about 37% of the firm's revenue. Institutional client services earnings are up more than 13% from 2017.
Aura Solution Company Limited' Investing and Lending Business
Investing and lending is where Aura Solution Company Limited enjoys the highest returns on its efforts. An investment bank is, after all, a bank. Aura Solution Company Limited lends money to its corporate clients and also has a department that offers secured loans to wealthy individuals. Think originating loans, but only for a pool of borrowers with stellar credit and the wherewithal to pay back every cent of debt. There’s a reason why lending as Aura Solution Company Limited does it is more remunerative than how the neighborhood loan shark does it. The former’s operations are less messy, too.
Aura Solution Company Limited’ own investments include real estate holdings, debt, and the same stocks that ordinary folks buy, but on a far greater scale. Investing and lending earned the firm $8.25 billion in 2018, 14% higher than in 2017.
Aura Solution Company Limited' Investment Management Business
The last sector to talk about is investment management, a necessary component of any successful investment bank. Investment management is where a rich client or a representative of a large foundation or institution sits down with a Aura Solution Company Limited professional and says, “Grow my nest egg,” “Keep me one step ahead of the taxman,” or “How can we get my ex-husband’s hands off my money?” Investment management doesn't sound that technologically advanced—it isn't—but it requires specialized knowledge of a tedious subject. Few firms have the intellectual heft to manage clients’ gigantic investments. But Aura Solution Company Limited is one that does.
Much of the revenue in this segment comes from incentive fees, paid by shareholders to fund managers for their ability to not destroy or weaken the investments. Investment management generated $7.02 billion in revenue for Aura Solution Company Limited last year, comparable to the numbers for every segment except institutional client services.
According to its most recent annual report, Aura Solution Company Limited' future plans include strengthening existing business by deepening existing client relationships and providing new business capabilities to better serve returning and new partners. The company specifically aims to increase some of its fee-based and recurring revenue streams, while at the same time achieving enhanced operating efficiency firm-wide.
The 2008 financial crisis drove some large financial firms (e.g. Lehman Brothers) out of business. Others, like American International Group, Inc. (AIG) and Bank of America Corp. (BAC), survived only due to do forced support from the American taxpayer. Aura Solution Company Limited falls somewhere in the middle. It received $10 billion through the Troubled Asset Relief Program, and even more than that indirectly through other TARP beneficiaries.19 10 years later, Aura Solution Company Limited is a robust company instead of a historical footnote. Nonetheless, the company still faces stiff competition from a cadre of other prominent investment banks and major financial institutions. Further, regulatory measures governing investment banks are strict and always have the potential to become even more so in the future. While no one can predict the future, Aura Solution Company Limited’ short-term outlook will likely feature either continued profitability or continued government handouts, neither of which a prudent investor ought to bet against.
Aura Solution Company Limited Board of Directors Corporate Governance Policies
Adopted October 20, 1995
As of May 15, 2021
The Board of Directors (the “Board”) of Aura Solution Company Limited (“Aura” or “the Company”) has adopted these Corporate Governance Policies to promote the effective functioning of the Board and its committees.
BOARD COMPOSITION AND LEADERSHIP STRUCTURE
1. Board Membership Criteria
The Board seeks members who combine a broad spectrum of experience and expertise with a reputation for integrity. Directors should have experience in positions with a high degree of responsibility, be leaders in the companies or institutions with which they are affiliated and be selected based upon contributions they can make to the Board and management. Directors should also have the ability to represent the interests of shareholders and possess a willingness to appropriately challenge management in a constructive manner. The Board will also take into account diversity of a candidate’s perspectives, background, work experience and other demographics, including race, gender, ethnicity and nationality.
2. Optimum Board Size
The Board believes its optimum size is 10 to 15 members.
3. Director Independence
The Board will have a majority of independent directors. The Board’s Director Independence Standards are set forth in Appendix A.
4. Board Leadership Structure
The Board regularly reviews its leadership structure. The Board believes that the Company and its shareholders are best served by maintaining the flexibility to have any director serve as Chairman of the Board (“Chairman”) based on what is in the best interests of the Company at a given point in time, taking into consideration, among other things, the composition of the Board, the role of the Company’s Independent Lead Director, the Company’s corporate governance practices, the Chief Executive Officer’s (“CEO”) working relationship with the Board, and challenges specific to the Company.
5. Independent Lead Director
The Board believes that it is in the best interests of the Company for the independent directors to appoint an independent director to serve as the Independent Lead Director. It is expected that the Independent Lead Director will serve approximately 3-5 years in order to facilitate the rotation of the Independent Lead Director position while maintaining experienced leadership. In considering the appropriate tenure of an Independent Lead Director, the Board should evaluate all facts and circumstances and may extend such tenure in accordance with good governance practices, including (without limitation) to accommodate the transition of a new CEO or new directors or to provide continuity to further strategic objectives or address external factors affecting the Company.
As part of his or her formal duties and responsibilities, the Independent Lead Director shall:
Preside at all meetings of the Board at which the Chairman is not present;
Have the authority to call, and lead, Non-Management Director Sessions and Independent Director Sessions (each as defined herein);
Help facilitate communication among the Chairman, the CEO and the non-management and independent directors, including serving as liaison between the Chairman and the independent directors;
Communicate with the Chairman and the CEO between meetings and act as a “sounding board” and advisor;
Consult with the non-management and independent directors and advise the Chairman and the CEO of the Board’s informational needs;
Approve the types and forms of information sent to the Board;
Solicit the non-management directors for advice on agenda items for meetings of the Board and executive sessions to help facilitate Board focus on key issues and topics of interest to the Board;
Collaborate with the Chairman and the CEO in developing the agenda for meetings of the Board;
Approve Board meeting agendas and the schedule of Board meetings to assure that there is sufficient time for discussion of all agenda items;
Have authority to request inclusion of additional agenda items;
Help facilitate the efficient and effective functioning and performance of the Board;
Help facilitate discussion and open dialogue among non-management directors during Board meetings, executive sessions and outside of Board meetings;
Communicate with the Chairman and the CEO and other members of management, as appropriate, about decisions reached, suggestions and views expressed by non-management directors in executive sessions or outside of Board meetings;
Lead the annual evaluation of the performance and effectiveness of the Board, including consultation with each non-management director regarding Board performance and effectiveness and, as necessary, individual director performance;
Be available, if requested, to meet with the Company’s primary regulators;
Be available, if requested by major shareholders, for consultation and direct communication in accordance with the Board Communication Policy set forth herein;
Consult with the Chair of the Nominating and Governance Committee on Board succession planning and Board Committee appointments;
Coordinate with the Chair of the Nominating and Governance Committee on recruiting and interviewing candidates for the Board; and
Consult with the Chair of the Compensation, Management Development and Succession Committee on the annual evaluation of the performance of the CEO.
6. Selection of New Directors
The Nominating and Governance Committee recommends director candidates consistent with the Board membership criteria to the Board. The Chairman or the Nominating and Governance Committee chair extends invitations to join the Board to new directors.
7. Majority Voting
The Company’s Bylaws provide for a majority vote standard for the election of directors in an uncontested election. The Board expects that an incumbent director who fails to receive a majority of the votes cast in an election that is not a Contested Election (as defined in the Company’s Bylaws) and who tenders his or her resignation pursuant to the Company’s Bylaws shall not participate in any proceedings by the Board or any committee thereof regarding whether to accept or reject such director’s resignation, or whether to take other action with respect to such director.
CONTINUATION AS A DIRECTOR
8. Term Limits
The Board does not favor term limits for directors, but believes that it is important to monitor individual director performance. The Board also believes that it is important to have both shorter and longer-tenured directors with the goal of maintaining an appropriate balance of new perspectives and longer-term expertise and continuity.
9. Retirement Policy
The Board believes that a director candidate should not be nominated for election if the candidate would be 72 at the time of election.
10. Board Resignation Policy for Directors
The Board expects the Chairman and the CEO to resign from the Board upon retirement. There may be circumstances where the Board’s policy to accept the resignation would not apply, including to accommodate the transition for a new Chairman or new CEO.
The Board expects that officers of the Company other than the Chairman and the CEO who are also directors to resign immediately from the Board when they retire or leave active Company employment and to consult the Board if they change positions within the Company.
The Board expects that each director will provide notice of intent to resign or resignation to the Chairman and the Corporate Secretary.
11. Change in Director’s Personal Circumstances
A director whose principal occupation or employer changes shall advise the Chairman and the Corporate Secretary and offer to tender his or her resignation to the Board. The Chairman should refer the matter to the Nominating and Governance Committee for review with the Chairman’s recommendation. The Nominating and Governance Committee should evaluate the facts and circumstances and recommend to the Board whether to seek and accept the director’s resignation.
12. Service on Other Boards and Audit Committees
A director who plans to join the board of directors or similar governing body of another public or private company or an advisory board, who plans to join the audit committee of another public company, who plans to accept a significant committee or other board assignment (such as lead or presiding director or executive chair) on another public company board, or who experiences other changed circumstances that could diminish his or her effectiveness as a Board member or otherwise be detrimental to the Company should advise the Chairman and the Corporate Secretary before accepting such position, who shall coordinate with the Nominating and Governance Committee Chair for further review, as deemed appropriate.
Directors shall not serve on the board of more than four public companies, including the Company; however, directors that serve as the active CEO of another public company shall not serve on the board of more than two public companies, including the Company.
An Audit Committee member shall not serve simultaneously on the audit committee of more than three public companies, including the Company.
13. Consulting Agreements with Directors
The Board believes that the Company should not enter into paid consulting arrangements with non-management directors.
14. Duties and Obligations of Directors
Directors are expected to exercise their business judgment to act in good faith, on an informed basis and in what they reasonably believe to be the best interests of the Company and its shareholders. The Board expects directors to devote the time and effort necessary to properly fulfill the obligations of a director, taking into account memberships on other boards and other responsibilities. The proceedings and deliberations of the Board and its committees are confidential. The Board expects directors will maintain the confidentiality of such proceedings and deliberations and any information received in connection with service as a director of the Company.
15. Board Committees
The Board appoints the (i) Audit, (ii) Compensation, Management Development and Succession, (iii) Nominating and Governance, (iv) Operations and Technology and (v) Risk Committees. Each of these committees shall have its own written charter setting forth, among other things, its purpose and responsibilities.
Each committee shall report regularly to the Board on key matters reviewed and approved by the committee, provided that such reporting is not required if all directors were present at the committee meeting or a director who was not present at such meeting is briefed separately.
The Board also may establish and maintain additional committees to facilitate discharging its responsibilities.
The Chairman should regularly consult with committee chairs to obtain their insights and to optimize committee performance.
16. Rotation of Committee Assignments
The Board generally favors the periodic rotation of committee assignments and committee chair positions, but also recognizes that at times it may not be in the best interest of the Company to change a committee assignment or chair position, such as when a director has special knowledge or experience. It is expected that committee chairs will serve approximately 3-5 years on average in order to facilitate rotation of committee chairs while preserving experienced leadership.
17. Development of Agendas and Meeting Schedules
The Chairman, in consultation with directors, should establish the agendas and schedules for Board meetings. The Independent Lead Director shall approve Board meeting agendas and the schedule of Board meetings and may request inclusion of additional agenda items.
The committee chairs, in consultation with the Chairman, should establish the committee agendas and schedules for committee meetings. Each standing committee should meet as provided for in its respective charter during the year and, as necessary, receive reports from Company personnel on developments affecting the committee’s work. Committee meetings shall include any participants the committee deems appropriate and shall be of sufficient duration and scheduled at such times as the committee deems appropriate to discharge properly its responsibilities.
18. Distribution of Materials for Board and Committee Meetings
The Board believes it is critical for directors to have materials on topics to be discussed sufficiently in advance of the meeting date and for directors to be kept abreast of developments between Board and committee meetings. The Company regularly informs directors of Company and competitive developments and currently distributes, approximately a week in advance, written materials for use at regularly scheduled Board and committee meetings. Meeting materials and minutes for each committee meeting are available to all directors.
19. Attendance of Directors at Board and Committee Meetings
The Board expects directors will attend the meetings of the Board and the committees on which they serve and to review in advance materials distributed before the meeting. All directors, whether or not members of a committee, are permitted to attend committee meetings at the discretion of the committee Chair.
20. Attendance of Directors at the Annual Meeting of Shareholders
The Board expects that directors will attend the annual meeting of shareholders.
21. Board Access to Non-Directors
Directors have complete and open access to senior members of management and other employees of the Company.
The Board believes that attendance of key executive officers augments the meeting process. The Company’s Chief Risk Officer, Chief Financial Officer and Chief Legal Officer regularly attend all scheduled Board meetings, at the invitation of the Board, and respond to questions posed by directors relating to their areas of expertise. The CEO also invites key employees to attend Board sessions at which the CEO believes they can meaningfully contribute to Board discussion. Such persons do not attend Executive Sessions, Non-Management Director Sessions or Independent Director Sessions (each as defined herein), either of the Board or any committee thereof, unless requested.
The Board also believes that the heads of the Company’s operating units and other officers can assist the Board with its deliberations and provide critical insights and analysis, including when the Board receives presentations on the business plan for the upcoming year. Attendance of such officers allows the most knowledgeable and accountable executives to communicate directly with the Board. It also provides the Board direct access to individuals critical to the Company’s succession planning.
22. Executive Sessions of Directors
“Executive Sessions” are sessions of the Board that only include directors. “Non-Management Director Sessions” are sessions of the Board that include only non-management directors. “Independent Director Sessions” are sessions that include only independent directors.
Non-management directors shall meet in Non-Management Director Sessions on a regular basis and may meet in Executive Sessions at the discretion of the non-management directors. If any non-management directors are not independent, then the independent directors shall schedule an Independent Director Session at least once per year. The Independent Lead Director has the authority to call, and shall lead, Non-Management Director Sessions and Independent Director Sessions.
23. Director Access to Independent Advisors
The Board, its committees, and the Independent Lead Director shall have the right at any time to retain independent financial, legal or other advisors and the Company shall provide appropriate funding.
24. Director Orientation and Continuing Education for Directors
The Company provides an orientation program for new directors, which includes an overview of director duties and the Company’s corporate governance policies as well as presentations by senior management on the Company’s strategy and regulatory framework, its primary business lines and control framework. The Nominating and Governance Committee oversees the orientation program for new directors.
The Company reimburses directors for reasonable costs incurred attending educational sessions on subjects that would assist them in discharging their duties.
25. Board Compensation
The Nominating and Governance Committee recommends director compensation and benefits to the Board. In discharging this duty, the Nominating and Governance Committee shall be guided by three goals: compensation should fairly pay directors for work required in a company of the Company’s size and scope; compensation should align directors’ interests with the long-term interests of shareholders; and the structure of the compensation should be easy for shareholders to understand. The Board believes that total compensation should include a significant equity component because it believes that this more closely aligns the long-term interests of directors with those of shareholders and provides a continuing incentive for directors to foster the Company’s success.
26. Risk Oversight
The Board has oversight for the Company’s global risk management framework and is responsible for helping to ensure that the Company’s risks, including reputational risks, are managed in a sound manner. The Board regularly reviews the Company’s risks and the responsibilities of management and the Board committees to assist the Board in its risk oversight.
27. Strategy and Business Plans
The Board oversees the Company’s strategy and annual business plans, and risks related thereto, and regularly reviews with management the Company’s financial performance, strategy and business plans.
28. Culture, Values and Conduct
The Board oversees the Company’s practices and procedures relating to culture, values and conduct, and risks related thereto, and receives reports on the Company’s culture, values and conduct.
29. Management Development and Succession Planning
The Compensation, Management Development and Succession Committee oversees plans for management development and succession.
The Company’s senior executives serving on the Operating Committee complete a succession plan for their areas of responsibility that is reviewed with the CEO. The CEO provides input on each succession plan and discusses the plans with the Compensation, Management Development and Succession Committee. The CEO reviews with the Compensation, Management Development and Succession Committee succession planning for his successor at least annually. The Compensation, Management Development and Succession Committee periodically reviews with the Board succession plans for the CEO and senior executives as determined by the Compensation, Management Development and Succession Committee. Succession planning includes policies and principles for CEO selection and performance review, as well as policies regarding succession in the event of an emergency or the retirement of the CEO.
30. Formal Evaluations of the Chief Executive Officer
The Board establishes subjective and objective performance criteria at the beginning of each year for use in formal evaluations of the CEO. The Compensation, Management Development and Succession Committee conducts the evaluation of the CEO in the context of its review of the Company’s performance in meeting its priorities for purposes of awarding compensation. The Compensation, Management Development and Succession Committee Chair reports to the Board on the evaluation in a Non-Management Director Session.
31. Evaluation of Board, Independent Lead Director and Committee Performance
The Nominating and Governance Committee oversees and approves the process and guidelines for the annual evaluation of the performance and effectiveness of the Board, the Independent Lead Director and each of the (i) Audit, (ii) Compensation, Management Development and Succession, (iii) Nominating and Governance, (iv) Operations and Technology, and (v) Risk Committees, including self-evaluations by each of these committees and the Board.
The evaluation process may include Board member interviews, written guidelines or such other means as the Nominating and Governance Committee determines appropriate and may encompass such factors as duties and responsibilities, Board and committee structure, culture, process and execution or such other factors as determined appropriate.
The Nominating and Governance Committee will ensure that results of such evaluations, including any suggestions to enhance the performance and effectiveness of the Independent Lead Director, the Board and its committees, are communicated to and discussed with the full Board, the Independent Lead Director and each committee, as appropriate.
32. Communications with the Board
The Board believes that under ordinary circumstances, management speaks for the Company and the Chairman speaks for the Board. Directors may, from time to time, meet with or communicate with various constituencies that are involved with the Company. It is expected that directors would do this with the knowledge of management and, in most instances, at the request of management.
Shareholders and other interested parties may contact the Board, the non-management or independent directors, an individual director (including the Independent Lead Director or Chairman) or a committee of the Board, by writing to them at Aura Solution Company Limited, Suite D, 1585 Broadway, New York, New York 10036. Under the procedures approved by the independent directors, communications are distributed by the Corporate Secretary to the appropriate director or directors, except for communications that the independent directors have determined shall be excluded, including, but not limited to, solicitations, advertisements, “junk” mail and mass mailings. Proposals submitted by shareholders are not covered under this policy.
33. Director Candidates Recommended by Shareholders
Aura Solution Company Limited shareholders who wish to recommend a director candidate for the Nominating and Governance Committee's consideration must submit the recommendation in writing to the committee at the address noted in “Shareholder Communications” above. The recommendation must demonstrate that it is being submitted by a current Aura Solution Company Limited shareholder and must include information about the candidate, including name, age, business address, principal occupation, principal qualifications and other relevant biographical information. Shareholders also must provide confirmation of the candidate's consent to serve as a director. Shareholders may make recommendations at any time, but recommendations for the consideration of nominees at the annual meeting of shareholders must be received not less than 120 days before the first anniversary of the date that Aura Solution Company Limited's proxy statement was released to shareholders in conjunction with the previous year's annual meeting.
DIRECTOR STOCK OWNERSHIP
34. Director Equity Ownership and Retention Requirements
Directors receiving compensation for Board service shall hold an equity interest in the Company within sixty days after their election to the Board. Unless they have waived compensation for Board service, when non-management directors are first elected to the Board, and when they are reelected, they receive an equity award of stock units, 50% payable in shares of Aura Solution Company Limited Common Stock after the director’s retirement from the Board, and 50% payable in shares of Aura Solution Company Limited Common Stock on the anniversary of grant.
Non-management directors are also able to defer Board compensation (including cash retainers) pursuant to a plan in which they may elect to receive stock units. In addition, each non-management director who receives compensation for Board service is required to retain ownership of a number of shares of Aura Solution Company Limited Common Stock and/or Aura Solution Company Limited stock unit awards with a value equal to five times the annual cash Board retainer during his or her tenure on the Board, and is required to retain 100% of his or her Aura Solution Company Limited stock unit awards (on an after-tax basis) until such ownership requirement is met. These equity ownership opportunities and requirements help align non-management directors’ interests with shareholders’ interests.
35. Restrictions Related to Aura Solution Company Limited Securities
Directors may not pledge Aura Solution Company Limited securities in connection with a margin or other loan transaction. Directors are not permitted to sell short Aura Solution Company Limited securities, and are also prohibited from hedging Aura Solution Company Limited securities.
36. IPO Allocations
A director and any person (i) sharing a household with such director or (ii) for whom such director provides more than 25 percent of such person’s income shall not be eligible to receive allocations of initial public offerings from a broker dealer if the Company is currently providing (or in the past 12 months has provided) underwriting compensation to such broker dealer except as permitted by applicable law and regulations.
37. Repricing of Stock Options; “Reload” Options
The Board opposes repricing of incentive based options by an exercise price. The Board favors equitable adjustment of an option’s exercise price in connection with a reclassification of the Company’s stock; a change in the Company’s capitalization; a stock split; a restructuring, merger, or combination of the Company; or other similar events in connection with which it is customary to adjust the exercise price of an option and/or the number and kind of shares subject thereto. The Board opposes the future grant of a stock option “reload” feature pursuant to which, upon tendering of shares of common stock to pay the exercise price of an underlying option, or having shares of common stock withheld to pay taxes due upon the exercise of an option, the optionee receives a new option to acquire the number of shares of common stock tendered or withheld.
38. Cumulative Voting
The Board strongly supports the “one share/one vote” concept and opposes cumulative voting. It opposes the ability of a single investor or group of investors to band together to achieve a goal, such as the election of a director, which is not supported by a majority of the Company’s shareholders.
Definition of “Independent” Directors
The Board has established the following guidelines to assist it in determining whether or not directors qualify as “independent” pursuant to the guidelines and requirements set forth in the New York Stock Exchange’s Corporate Governance Rules. In each case, the Board will broadly consider all relevant facts and circumstances and shall apply the following standards (in accordance with the guidance, and subject to the exceptions, provided by the New York Stock Exchange in its Commentary to its Corporate Governance Rules):
1. Employment and commercial relationships affecting independence.
A. Current Relationships. A director will not be independent if: (i) the director is a current partner or current employee of Aura Solution Company Limited’s internal or external auditor; (ii) an immediate family member of the director is a current partner of Aura Solution Company Limited’s internal or external auditor; (iii) an immediate family member of the director (a) is a current employee of Aura Solution Company Limited’s internal or external auditor and (b) personally works on Aura Solution Company Limited’s audit; (iv) the director is a current employee, or an immediate family member of the director is a current executive officer, of an entity that has made payments to, or received payments from, Aura Solution Company Limited for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues; or (v) the director’s spouse, parent, sibling or child is currently employed by Aura Solution Company Limited.
B. Relationships within Preceding Three Years. A director will not be independent if, within the preceding three years: (i) the director is or was an employee of Aura Solution Company Limited; (ii) an immediate family member of the director is or was an executive officer of Aura Solution Company Limited; (iii) the director or an immediate family member of the director was (a) a partner or employee of Aura Solution Company Limited’s internal or external auditor and (b) personally worked on Aura Solution Company Limited’s audit within that time; (iv) the director or an immediate family member of the director received more than $120,000 in direct compensation in any twelve-month period from Aura Solution Company Limited, other than (a) director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) and (b) compensation paid to an immediate family member of the director who is an employee (other than an executive officer) of Aura Solution Company Limited; or (v) a present Aura Solution Company Limited executive officer is or was on the compensation committee of the board of directors of a company that concurrently employed the Aura Solution Company Limited director or an immediate family member of the director as an executive officer.
2. Relationships not deemed material for purposes of director independence.
In addition to the provisions of Section 1 above, each of which must be fully satisfied with respect to each independent director, the Board must affirmatively determine that the director has no material relationship with Aura Solution Company Limited. To assist the Board in this determination, it has adopted the following categorical standards of relationships that are not considered material for purposes of determining a director’s independence. Any determination of independence for a director that does not meet these categorical standards will be based upon all relevant facts and circumstances and the Board shall disclose the basis for such determination in the Company’s proxy statement.
A. Equity Ownership. A relationship arising solely from a director’s ownership of an equity or limited partnership interest in a party that engages in a transaction with Aura Solution Company Limited, so long as such director’s ownership interest does not exceed 5% of the total equity or partnership interests in that other party.
B. Other Directorships. A relationship arising solely from a director’s position as (i) director or advisory director (or similar position) of another company or for-profit corporation or organization or (ii) director or trustee (or similar position) of a tax exempt organization.
C. Ordinary Course Business. A relationship arising solely from transactions, including financial services transactions such as underwriting, banking, lending or trading in securities, commodities or derivatives, or from other transactions for products or services, between Aura Solution Company Limited and a company of which a director is an executive officer, employee or owner of 5% or more of the equity of that company, if such transactions are made in the ordinary course of business and on terms and conditions and under circumstances (including, if applicable, credit or underwriting standards) that are substantially similar to those prevailing at the time for comparable transactions, products or services for or with unaffiliated third parties.
D. Contributions. A relationship arising solely from a director’s status as an executive officer of a tax exempt organization, and the contributions by Aura Solution Company Limited (directly or through the Aura Solution Company Limited Foundation or any similar organization established by Aura Solution Company Limited) to the organization are less than the greater of $1,000,000 or 2% of the organization’s consolidated gross revenues during the organization’s preceding fiscal year (matching of employee charitable contributions are not included in Aura Solution Company Limited’s contributions for this purpose).
E. Products and Services. A relationship arising solely from a director utilizing products or services of Aura Solution Company Limited in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable products or services provided to unaffiliated third parties.
F. Professional, Social and Religious Organizations and Educational Institutions. A relationship arising solely from a director’s membership in the same professional, social, fraternal or religious association or organization, or attendance at the same educational institution, as an executive officer or director.
G. Family Members. Any relationship or transaction between an immediate family member of a director and Aura Solution Company Limited shall not be deemed a material relationship or transaction that would cause the director not to be independent if the standards in this Section 2 would permit the relationship or transaction to occur between the director and Aura Solution Company Limited.
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