Pottery Barn 2010 Annual Report Download - page 106

What is our Board leadership structure?
We currently separate the positions of Chief Executive Officer and Chairman of the Board. Since May 2010,
Adrian D.P. Bellamy, one of our independent directors who previously served as our Lead Independent Director,
has served as our Chairman of the Board. Our Corporate Governance Guidelines also provide that in the event
that the Chairman of the Board is not an independent director, the Board shall elect a Lead Independent Director.
Separating the positions of Chief Executive Officer and Chairman of the Board maximizes the Board’s
independence and aligns our leadership structure with current trends in corporate governance best practices. Our
Chief Executive Officer is responsible for day-to-day leadership and for setting the strategic direction of the
company, while the Chairman of the Board provides independent oversight and advice to our management team,
as well as presides over Board meetings.
Do we have a Lead Independent Director?
No. On May 26, 2010 the Board appointed Adrian D.P. Bellamy, an independent director, as 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
each committee is responsible for evaluating certain risks and overseeing the management of such risks, the
entire Board is regularly informed through committee reports about such risks.
Did the company evaluate risks relating to its executive and non-executive compensation programs?
Our Compensation Committee is responsible for monitoring our compensation policies and practices relative to
all our employees, including non-executive officers, for potential risks that are reasonably likely to have a
material adverse effect on our company. In performing its duties, the Compensation Committee regularly reviews
and discusses potential risks that could arise from our employee compensation plans and programs with our
management and the Committee’s independent compensation consultant. The Compensation Committee is
responsible for reporting to the Board any material risks associated with our compensation plans and programs,
including recommended actions to mitigate such risks.
For fiscal 2010, the Compensation Committee retained its independent consultant, Frederic W. Cook & Co. or
Cook & Co., to identify and assess the risk inherent in the company’s compensation programs and
policies. Accordingly, Cook & Co. evaluated the company’s executive and non-executive compensation
programs for such risk and the mechanisms in our programs designed to mitigate these risks. Among other
things, Cook & Co. reviewed our pay philosophy, forms of incentives, performance metrics, balance of cash and
equity compensation, balance of long-term and short-term incentive periods, compensation governance practices,
and equity grant administration practices. Based on the assessment, Cook & Co. concluded that the company’s
compensation programs and policies do not create risks that are reasonably likely to have a material adverse
effect on our company.
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