Kroger 2015 Annual Report Download - page 17

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Information Concerning the Board of Directors
Board Leadership Structure and Lead Independent Director
The Board is currently composed of eleven independent non-employee directors and one management
director, Mr. McMullen, the Chairman and CEO. Kroger has a balanced governance structure in which
independent directors exercise meaningful and vigorous oversight.
In addition, as provided in the Guidelines on Issues of Corporate Governance (the “Guidelines”),
the Board has designated one of the independent directors as Lead Director. The Lead Director works
with the Chairman to share governance responsibilities, facilitate the development of Kroger’s strategy
and grow shareholder value. The Lead Director serves a variety of roles, consistent with current best
practices, including:
• reviewing and approving Board meeting agendas, materials and schedules to confirm the
appropriate topics are reviewed and sufficient time is allocated to each;
• serving as the principal liaison between the Chairman, management and the non-management
directors;
• presiding at the executive sessions of independent directors and at all other meetings of the Board
at which the Chairman is not present;
• calling meetings of independent directors at any time; and
• serving as the Board’s representative for any consultation and direct communication, following a
request, with major shareholders.
The Lead Director carries out these responsibilities in numerous ways, including:
• facilitating communication and collegiality among the Board;
• soliciting direct feedback from non-executive directors;
• overseeing the succession process, including site visits and meeting with a wide range of corporate
and division management associates;
• meeting with the CEO frequently to discuss strategy;
• serving as a sounding board and advisor to the CEO; and
• discussing Company matters with other directors between meetings.
Unless otherwise determined by the Board, the chair of the Corporate Governance Committee is
designated as the Lead Director. Robert Beyer, an independent director and the chair of the Corporate
Governance Committee, is currently the Lead Director. Mr. Beyer is an effective Lead Director for Kroger
due to, among other things, his independence, his deep strategic and operational understanding of
Kroger obtained while serving as a Kroger director, his insight into corporate governance, his experience
on the boards of other large publicly traded companies, and his commitment and engagement to carrying
out the roles and responsibilities of the Lead Director.
With respect to the roles of Chairman and CEO, the Guidelines provide that the Board will determine
when it is in the best interests of Kroger and our shareholders for the roles to be separated or combined,
and the Board exercises its discretion as it deems appropriate in light of prevailing circumstances. Upon
retirement of our former Chairman, David B. Dillon, on December 31, 2014, the Board determined that it
is in the best interests of Kroger and our shareholders for one person to serve as the Chairman and CEO,
as was the case from 2004 through 2013. The Board believes that this leadership structure improves the
Board’s ability to focus on key policy and operational issues and helps the Company operate in the long-
term interests of shareholders. Additionally, this structure provides an effective balance between strong
Company leadership and appropriate safeguards and oversight by independent directors. The Board
believes that the combination or separation of these positions should continue to be considered as part of
the succession planning process, as was the case in 2003 and 2014 when the roles were separated.