Summit Conference 2013December 5, 2013

“Building a Great Board”

Jerry C. AtkinChairman and CEO

SkyWest, Inc.

Route Map: Combined

Major Partners: 5Employees: 20,633Daily Flights: 3,878Hubs: 19Aircraft: 744Destinations: 3622012 Passengers: 58.7m2012 Departures: 1,435,512

Our Focus

Highest Quality Service

Extremely Competitive Costs

Best Financial Strength and Discipline

Best Place to Work

1972: The Beginning

Finds the Company Broke

1975: Jerry Joins SkyWest

1986: Going Public

1994: Canadair Regional Jet (CRJ200) added to fleet

Professional Search Firm

Building a Great Board

Building a Great Board

What Works / What Doesn’t Work

Challenges of Attracting Board Members1) Strong demand for Board Members2) Experienced people are already taken and

more limited board service today3) Travel and geographic limitations4) Board compensation – similar sized company5) Time and effort required

Building a Great Board

Know What You Need

2013 Board Member Strengths/Attributes: 1 2 3 4 5 6 7 8

Ranking: 1-10 Avg.

Skill/Knowledge

1. Leadership/large people operating experience 2 3 9 8 6 7 2 9 6.3

2. Leadership/large financial/capital experience 4 2 9 6 10 8 2 4 5.9

3. Leadership/airline/aviation experience 2 4 3 8 9 2 2 6 4.9

4. Knowledge of public company 8 7 8 7 7 7 5 46.4

5. Knowledge of airline/aviation industry 4 6 4 9 10 5 4 56.1

6. Strategy/directional expertise 6 7 7 8 9 8 9 6 7.7

7. Financial knowledge/skill 9 5 8 9 9 9 6 67.4

8. Financial Expert (SEC criteria) 10 10 10 10 10 10 0 0 7.1

Attributes

9. Quick to call “BS” 3 3 7 7 7 10 5 56.3

10. Patient and collegial 8 8 9 7 7 4 9 8 7.4

11. Diversity (female/color) 0 0 0 0 0 0 0 9 1.3

12. Diversity (geography/religion/other 2 2 8 2 7 10 3 8 5.7

13. Diversity – age within 12 yrs. of 72 10 10 0 10 10 0 0 0 4.3

14. Diversity – age more than 12 yrs. of 72 0 0 10 0 0 10 10 10 5.7

Building a Great Board

Building a Great Board

Ideal Board Candidate Criteria• Unassailable personal and professional credibility and pedigree• Current president or chief executive officer of public company• Prior experience as an independent board director• Experienced in “relevant” industry with similar characteristics to the regional

airline sector, i.e.: asset-intensive, service-sector, network-oriented, people/labor-intensive, cyclical, business-to-business, complex (lots of moving pieces), and challenging industry – with logical options including but not restricted to railroad, shipping, trucking, car rental, cruise, hospitality, waste management, etc.

• Located in the western U.S., given the travel requirements to St. George, Utah• Collegial in orientation• Sound/independent judgment• Ability to think strategically• Diversity helpful but not required• Willing and able to attend all board meetings and serve on committee’s• Age of early 50’s or younger• No conflict of interest

Building a Great Board

Advantages of Using a Search Firm1) More options to choose from2) Forces a well-organized process that creates a

sharper focus internally3) Better chances to get what you’re looking for4) Takes the friends and relatives “natural” default

out of the equation5) The Chairman/CEO can focus on getting what

the organization needs6) Forces a disciplined timeframe for execution7) Results in a better outcome because efforts are

focused on the important issues

Building a Great Board

Board Search Process1) Hire a search firm (~$100,000)2) Tell them what you’re looking for – they can help with specifications/qualifications3) Have the Nominating and Corporate Governance Committee (“the Committee”) approve

the search firm, and the specifications/qualifications for the new Director4) The firm does a search that includes suggestions from current directors5) Top 15 “paper candidates” shared with the Committee to refine to 5-8 top candidates6) Search firm talks to the candidates on a generic basis and the list is narrowed to the top

three7) Chairman does a telephone interview with each of the top three and confirms if there is

interest in the position8) Invitation to visit the Company’s headquarters to meet and visit with top executives9) Based on continued interest by the candidate and the Chairman:10) A visit with the Lead Director is scheduled – in person preferred, but telephone interview

can work11) Final recommendation made to the Committee and a choice is made12) Offer made to candidate and additional information pertaining to the board is provided

Building a Great Board

Jerry C. Atkin Member of the Board since 1975

Henry J. EyringMember of the Board since 1995

Steven F. Udvar-HazyMember of the Board since 1986

J. Ralph AtkinMember of the Board since 1972

Ron MittelstaedtMember of the Board since 2013

James L. WelchMember of the Board since 2007

W. Steve AlbrechtMember of the Board since 2003

Keith SmithMember of the Board since 2013

Margaret "Peg" S. BillsonMember of the Board since 2006

Robert G. SarverMember of the Board since 2000

Building a Great Board

Board Succession Planning 1) Continuous age mix2) Age guideline (72 years)3) Length of Service limits (SkyWest doesn’t)4) Active vs. retired person5) Diversity – a challenge6) Adapt to opportunities – 2 for 17) Replacing people on the Board

Building a Great Board

The High Value of a Board•Better and Smarter Enterprise Decisions•In Good Times•Especially in Challenging Times•Development of Executives

QuestionsQuestions