Staples 2004 Annual Report Download - page 32

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CORPORATE GOVERNANCE
We have, since our founding, sought to follow best practices in corporate governance in a manner that is in the
best interests of our business and stockholders. You can find our current corporate governance principles, including
our Corporate Governance Guidelines, Committee Charters and Code of Ethics, on our public web site at
www.staples.com/about. We are in compliance with the corporate governance requirements imposed by the Sarbanes-
Oxley Act, SEC and NASDAQ. We will continue to modify our policies and practices to meet ongoing developments
in this area. We have discussed many features of our corporate governance principles in other sections of this Proxy
Statement. Some of the highlights are:
•Director and Committee Independence. A substantial portion (9 of 12) of our Board is independent, all
members of our Audit, Compensation, Nominating and Corporate Governance, and Finance Committees are
independent Directors, and none of our committee members receives compensation from us other than for
service on the Board or its committees. For this purpose, Directors are ‘‘independent’’ if they (1) meet the
‘‘independence’’ definition of NASDAQ, and (2) in the Board’s judgment, do not have a relationship with the
Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of
a director.
•Audit Committee. The Audit Committee is directly responsible for appointing, compensating, evaluating and,
when necessary, terminating our independent registered public accounting firm, and our independent
registered public accounting firm reports directly to the Committee. Our Board has determined that we have at
least one ‘‘audit committee financial expert’’ under the rules of the SEC. Under the Committee’s charter, the
Committee’s prior approval is required for all audit services and non-audit services (other than de minimis
non-audit services as defined by the Sarbanes-Oxley Act) to be provided by our independent registered public
accounting firm. In addition, the Committee has caused the Company to adopt policies prohibiting
(i) executive officers from retaining our independent registered public accounting firm to provide personal tax
or other services, and (ii) us, without first obtaining the Committee’s approval, from filling an officer level
position in the finance department with a person who was previously employed by our independent registered
public accounting firm.
•Committee Authority. Each of the Audit, Compensation, Nominating and Corporate Governance, and Finance
Committees has the authority to retain independent advisors and consultants, with all fees and expenses to be
paid by us.
•Lead Director and Required Meetings of Independent Directors. We have a Lead Director, currently Martin
Trust, who is independent and is responsible for assuring that at least two meetings of independent Directors
are held each year, facilitating communications between other independent directors and the Chairperson of
the Board and Chief Executive Officer, chairing the annual performance review of the Chief Executive Officer,
and consulting with the Chairperson of the Board and Chief Executive Officer on matters relating to corporate
governance and Board performance. The Lead Director is elected by our independent Directors, upon the
recommendation of the Nominating and Corporate Governance Committee.
•No Shareholder Rights Plan. We do not currently have a shareholder rights plan in effect and are not
considering adopting one. In addition, our Board has adopted a shareholder rights plan policy, under which the
Company will only adopt a shareholder rights plan if the plan has been approved by stockholders either in
advance of, or within 12 months of, its adoption by our Board.
•Responsiveness to Majority Approved Stockholder Proposal. In response to our stockholders’ June 2004
request that we adopt a policy on adopting, maintaining or extending a shareholder rights plan, in
December 2004, the Board adopted the shareholder rights plan policy described above under ‘‘No Shareholder
Rights Plan.’’
•Whistleblower Procedures. The Audit Committee has established procedures for the treatment of complaints
regarding accounting, internal accounting controls or auditing matters, including procedures for confidential
and anonymous submission by our associates of concerns regarding questionable accounting, internal
accounting controls or auditing matters.
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