Pursuant to an exception under the NYSE listing standards for foreign private issuers, Seadrill Partners LLC, a Marshall Islands limited liability company (the "Company"), is not required to comply with the corporate governance practices followed by U.S. companies under the NYSE listing standards. However, pursuant to Section 303.A.11 of the NYSE Listed Company Manual, we are required to state any significant differences between our corporate governance practices and the practices required by the NYSE for U.S. companies. We believe that our established practices in the area of corporate governance are in line with the spirit of the NYSE standards and provide adequate protection to our unitholders. The significant differences between our corporate governance practices and the NYSE standards applicable to listed U.S. companies are set forth below.
The NYSE requires that non management directors meet regularly in executive sessions without management. The NYSE also requires that all independent directors meet in an executive session at least once a year. As permitted under Marshall Islands law and our limited liability company agreement, our non management directors do not regularly hold executive sessions without management and we do expect them to do so in the future.
Nominating/Corporate Governance Committee
The NYSE requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Marshall Islands law and our limited liability company agreement, we do not currently have a nominating or corporate governance committee.
The NYSE requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members. As permitted by Rule 10A 3 under the Securities and Exchange Act of 1934, as amended, our audit committee currently consists of [two] independent member of our board of directors. In accordance with the NYSE and the United States Securities and Exchange Commission?s (the "SEC") phase-in provisions for companies listing in connection with their initial public offering, we expect to appoint an additional director meeting applicable audit committee independence standards to serve as the third member of our audit committee within one year after the effective date of our Registration Statement on Form F-1 (the "Registration Statement"). Under the Audit Committee charter, the Audit Committee confers with the Company's independent registered public accounting firm and reviews, evaluates and advises the board of directors concerning the adequacy of the Company's accounting systems, its financial reporting practices, the maintenance of its books and records and its internal controls. In addition, the Audit Committee reviews the scope of the audit of the Company?s financial statements and results thereof.
The NYSE requires that a listed U.S. company have a compensation committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Marshall Islands law and our limited liability company agreement, we do not currently have a compensation committee.
Corporate Governance Guidelines
The NYSE requires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. We are not required to adopt such guidelines under Marshall Islands law and we have not adopted such guidelines.
We do encourage our unitholders that wish to learn more about our governance practices to review our Registration Statement, which has been publicly filed with the SEC.