32 ELI LILLY AND COMPANY GOVERNANCE Board of Directors Q&A WITH JUAN LUCIANO, LEAD DIRECTOR What has the board done in response to shareholder engagement this year? The board believes engagement with our shareholders and other key stakeholders is central to how we govern the company. In 2019, we spoke with a number of investors on topics such as proxy access; eliminating the company’s classified board and supermajority voting requirements; environmental, social and governance topics including drug pricing and product quality and safety; our board and corporate culture; litigation and key enterprise risks; and the company’s executive compensation. As a result of input from our shareholders, we recently amended the company’s bylaws to include proxy access provisions. Once again, the board is putting forward management proposals to eliminate the classified board structure Juan, what were some of the company’s major and supermajority voting provisions. accomplishments in 2019? Why is Lilly’s current governance structure best suited In 2019, the company made major strides in implementing our to drive innovation? long-term strategy. We made significant pipeline advances. We also had significant business development engagement: we completed We’re dedicated to effective oversight of our business and believe the divestiture of Elanco Animal Health Inc., enabling Lilly to that governance is key to the board’s effective oversight of our focus solely on its human pharmaceutical business, and acquired long-term performance, strategy, key risks and compliance. Loxo Oncology, which is the largest in a series of transactions the Our board believes independence is key to strong corporate company has conducted to broaden its oncology portfolio. governance. The dual roles of an executive chair and a strong, independent lead director are important in balancing inputs to We also introduced Insulin Lispro, a lower-priced version of the board. As our Chairman and CEO, Dave Ricks provides strong Humalog®, in the U.S., providing patients with diabetes an insulin operational leadership coupled with a long-term strategic agenda. option with a list price 50% lower than the current Humalog list This is vital to our innovative research and development business, price. We’ve continued this approach in 2020, adding two versions which has prolonged product development cycles. Further, of the Humalog KwikPen® to our lower-priced insulin solutions. leveraging my experience as the CEO for a Fortune 100 company, Going forward in 2020, pricing and the dynamic health care I lead the independent directors in their analysis of company environment, particularly in the U.S., will continue to be of decisions and performance and in the other elements of our particular focus to the board. Also, the board will continue to important oversight function for the company. focus in 2020 on ensuring a robust pipeline, through both internal and external innovation, and execution on our key business priorities.