Pottery Barn 2009 Annual Report Download - page 103

What is our Board leadership structure?
Currently, our Chief Executive Officer, W. Howard Lester, also serves as our Chairman of the Board. We believe
that our current corporate governance structure, with its strong emphasis on Board independence, provides
effective independent oversight of management, while allowing both the Board and management to benefit from
Mr. Lester’s over 30 years of experience with the company. As both Chief Executive Officer and Chairman of
the Board, Mr. Lester has contributed his insight and experience to the day-to-day leadership of the company,
while simultaneously leading the Board to provide knowledgeable advice to the company and our management
team. With Mr. Lester as Chairman, the Board has continued to maintain its high standards of independence.
Seven of the Board’s nine directors are independent under NYSE rules and our own director independence
standards. In addition, every member of each of the Board’s three committees is independent. Board members
have complete access to management and outside advisors, and the Board and each Board committee meet
regularly in executive session without management. We also have a Lead Independent Director. See the section
below titled “Do we have a Lead Independent Director?” for further information regarding that role.
Following Mr. Lester’s retirement effective as of May 26, 2010, the date of the 2010 Annual Meeting, the Board
intends to appoint Laura Alber to the role of Chief Executive Officer. The Board also intends to appoint Adrian
Bellamy, who currently serves as the Board’s Lead Independent Director, as the Chairman. Upon his
appointment to that position, Mr. Bellamy will no longer serve as the Lead Independent Director, as discussed
below. With the retirement of Mr. Lester, we believe that the company is well positioned to transition to a
leadership structure with separate Chief Executive Officer and Chairman roles. This new leadership structure will
maximize the Board’s independence and align our leadership structure with current trends in corporate
governance best practices. The Chief Executive Officer will continue to be responsible for day-to-day leadership
and for setting the strategic direction of the company, while the Chairman will provide independent oversight and
advice to our management team. The Chairman will continue to preside over Board meetings.
Do we have a Lead Independent Director?
Yes. On February 23, 2009, the Board adopted a Lead Independent Director charter, and on March 20, 2009, the
independent directors appointed Adrian Bellamy to serve as our Lead Independent Director. The Lead
Independent Director’s responsibilities include presiding over all meetings of the Board at which the Chairman is
not present, including executive sessions of independent directors, leading the Board’s succession planning
process for our Chief Executive Officer, calling meetings of the independent directors when necessary, serving as
the principal liaison between the non-employee directors and the Chairman on sensitive issues, and serving as a
liaison for consultation and communication with shareholders, as needed.
Mr. Bellamy will serve in this capacity until May 26, 2010, the date of the 2010 Annual Meeting. At that time,
following the retirement of W. Howard Lester, who currently serves as both Chief Executive Officer and
Chairman of the Board, the Board intends to appoint Adrian Bellamy as the Chairman of the Board.
What is the Board’s role in overseeing the risk management of the company?
The Board actively manages the company’s risk oversight process and receives regular reports from management
on areas of material risk to the company, including operational, financial, legal and regulatory risks. Our Board
committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Audit and
Finance Committee assists the Board with its oversight of the company’s major financial risk exposures.
Additionally, in accordance with NYSE requirements, the Audit and Finance Committee reviews with
management the company’s major financial risk exposures and the steps management has taken to monitor and
control such exposures, including the company’s risk assessment and risk management policies. The
Compensation Committee assists the Board with its oversight of risks arising from our compensation policies and
programs. The Nominations and Corporate Governance Committee assists the Board with its oversight of risks
associated with Board organization, Board independence, succession planning, and corporate governance. While
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