Pottery Barn 2013 Annual Report Download - page 98

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CORPORATE GOVERNANCE
Director Independence
Our Board of Directors has determined that Adrian D.P. Bellamy, Rose Marie Bravo, Adrian T. Dillon, Anthony
A. Greener, Ted W. Hall, Michael R. Lynch and Lorraine Twohill meet the independence requirements of our
“Policy Regarding Director Independence Determinations,” which is part of our Corporate Governance
Guidelines. Accordingly, the Board has determined that none of these director nominees has a material
relationship with us and that each of these nominees is independent within the meaning of the NYSE and SEC
director independence standards, as currently in effect. Further, each member of our Board committees satisfies
the independence requirements of the NYSE and SEC, and any heightened independence standards applicable to
each committee on which they serve. The Board’s independence determination was based on information
provided by our director nominees and discussions among our officers and directors.
Board Leadership Structure
We currently separate the positions of Chief Executive Officer and Chairman of the Board. Adrian D.P. Bellamy,
an independent director, has served as our Chairman of the Board since May 2010. Our Corporate Governance
Guidelines provide that in the event that the Chairman of the Board is not an independent director, the Board
shall elect a Lead Independent Director. As Mr. Bellamy is an independent director, we have not appointed a
separate 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,
and presides over Board meetings.
Risk Oversight
Board Oversight of Risk
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 and assesses on an annual basis potential material risk to the company from its compensation policies
and programs, including incentive and commission plans at all levels. 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.
Evaluation of Risks Relating to Compensation Programs
Our Compensation Committee is responsible for monitoring our compensation policies and programs 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 Compensation Committee’s independent compensation consultant. The Compensation
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