AutoZone 2013 Annual Report Download - page 15

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Our Lead Director:
• Chairs Board meetings when the Chairman is not present, including presiding at all executive sessions of
the Board (without management present) at every regularly scheduled Board meeting;
• Works with management to determine the information and materials provided to Board members;
• Approves Board meeting agendas, schedules and other information provided to the Board;
• Consults with the Chairman on such other matters as are pertinent to the Board and the Company;
• Has the authority to call meetings of the independent directors;
• Is available for direct communication and consultation with major shareholders upon request; and
• Serves as liaison between the Chairman and the independent directors.
Board Risk Oversight
Oversight of risk management is a responsibility of the Board of Directors and is an integral part of the
Board’s oversight of AutoZone’s business. AutoZone’s management takes a variety of calculated risks in order
to enhance Company performance and shareholder value. The primary responsibility for the identification,
assessment and management of the various risks resides with AutoZone’s management. The Board of Directors
is primarily responsible for ensuring that management has established and adequately resourced processes for
identifying and preparing the Company to manage risks effectively. Additionally, the Board reviews the
Company’s principal strategic and operating risks as part of its regular discussion and consideration of
AutoZone’s strategy and operating results. The Board also reviews periodically with the General Counsel legal
matters that may have a material adverse impact on the Company’s financial statements, the Company’s
compliance with laws and any material reports received from regulatory agencies.
The Audit Committee is involved in the Board’s oversight of risk management. At each of its regular
meetings, the Audit Committee reviews the Company’s major financial exposures and the steps management has
taken to identify, assess, monitor, control, remediate and report such exposures. The Audit Committee, along
with management, also evaluates the effectiveness of the risk avoidance and mitigation processes in place. Such
risk-related information is then summarized, reported and discussed at each quarterly Board of Directors
meeting.
To assist with risk management and oversight, AutoZone has adopted the concept of enterprise risk
management (“ERM”) using the framework issued in 2004 by the Committee of Sponsoring Organizations of
the Treadway Commission. The Company’s Vice President of Internal Audit, who reports directly to the Audit
Committee, has been charged with leading the Company’s ERM processes with the assistance of Company
management. The Vice President of Internal Audit presents to the Audit Committee a comprehensive review of
the Company’s ERM processes annually. This presentation includes an overview of all significant risks that
have been identified and assessed and the strategies developed by management for managing such risks. The
Vice President of Internal Audit leads open discussions with the Audit Committee members to analyze the
significance of the risks identified and to verify that the list is all-inclusive. Company management is also
involved in these discussions to ensure that the Board gains a full understanding of the risks and the strategies
that management has implemented to manage the risks.
Other Board committees also consider significant risks within their areas of responsibility. The
Compensation Committee considers risk in connection with the design of AutoZone’s compensation programs.
The Nominating and Corporate Governance Committee oversees risks related to the Company’s governance
policies and practices.
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