Robust oversight benefits from board-level committee structures that effectively divide responsibilities into focused areas, especially around complex or high-risk issues. As long-time shareholders, we believe that the current structure of Block's Board of Directors is deficient. Block's Audit and Risk Committee (Audit Committee) is overburdened. In addition to data privacy and cybersecurity, the Audit Committee's charter includes oversight of the independent auditor; legal and regulatory compliance; internal controls and audit; financial statements; risk management; related party transactions; and oversight of Square Financial Services, the Company's industrial loan subsidiary. The three current Audit Committee directors all serve on other board-level committees and have significant outside obligations. For example, one director serves as board chair of an international bank, a global media conglomerate, and the UK'S largest airport. Another was until recently the managing partner of a large venture capital firm, where he still serves as parter [sic], in addition to serving on the boards of three other public companies. Block does not disclose a skills matrix that would allow investors to ascertain whether the Audit Committee's directors have the requisite knowledge to effectively oversee technology risk and adoption in addition to their already wide-ranging remit and outside obligations. Four of the Company's 10 board members do not serve on any committees. On January 15, 2025, Block paid $80 million to settle a coordinated financial enforcement action by 48 state regulators for violations of the Bank Secrecy Act and anti-money laundering laws. A consent order related to the same matters with New York State Department of Financial Services resulted in an additional $40 million penalty and cited cybersecurity deficiencies noting that "the Company's cybersecurity program [was] not subject to annual board review and approval" as required by state law. The next day, the Consumer Financial Protection Bureau announced a separate $175 million settlement with Block for weak security protocols that "allowed fraud to proliferate." The creation of a Technology Committee would help Block's board mitigate risks, better utilize its time and resources, make more informed decisions, strengthen accountability, and seize opportunities related to new technology adoption.