41 Governance We operate in a dynamic industry and have been in a state of constant innovation since inception. We have redefined how people watch video—first through DVD-by-mail, then streaming video, and now as one of the world’s leading entertainment services with approximately 222 million members in 190 countries. Our success has not gone unnoticed, and we are seeing increasing competition, even as this dynamic market continues to evolve. Our corporate governance structure is built against this backdrop. Governance, in this context, means finding the right balance of rights and responsibilities among shareholders, the Board, and management, and ensuring that there are appropriate checks and balances in place. With the rapid evolution of technology and the changing media landscape, we are continually adjusting our service to meet the needs and desires of our consumers. Our governance structure has been deliberately constructed to help us to do that. Our focus is on creating long-term value for our shareholders, and we have been successful at that – since our initial public offering in 2002, annualized total stockholder return through December 31, 2021 was 38%. While our current governance structure has served our shareholders extraordinarily well with a sustained period of substantial growth, we’ve clearly proven our business model: streaming is now an established business, we’re self-funding and expect sustained positive free cash flow, and we’ve substantially scaled our revenues, operating profit and margins. As such, the Board has decided to evolve to a more standard large- cap governance structure, and will be recommending several changes at the upcoming 2022 annual meeting including elimination of supermajority voting provisions, allowing shareholders to call special meetings, and proposing that the Board declassify and stand for annual elections. We will also change the voting standard for our directors in uncontested elections. We strive to stay in tune with our ownership base. Our Board and our management team engage directly and regularly with our shareholders, and our Board and its committees consider shareholders’ feedback in assessing our governance structure, including our compensation program. This past fall, we convened a virtual ESG investor day that brought directors, management and various subject matter experts together with a range of our shareholders representing approximately 40% of shares outstanding. This provided a direct opportunity to share information and perspectives and we appreciated the time and candor of those in attendance. These engagements provide a good opportunity to share views and answer questions; the input from our shareholders will continue to inform our ongoing evaluation of our structure. We are committed to managing our business ethically and with integrity. Our Code of Ethics sets out our expectations for conduct among our employees and Board members. We encourage reporting of breaches of our Code or any unethical or inappropriate conduct to our Chief Legal Officer or, in the case of misconduct by a senior financial officer, to the Chair of our Audit Committee. We also provide access to a third-party operated service where reports of misconduct can be made confidentially and, if desired, anonymously, 24 hours a day, seven days a week, 365 days a year in local languages. Reports made through this service are elevated and investigated until they are resolved, and updates are provided annually to the Audit Committee.