Staples 2014 Annual Report Download - page 20

CORPORATE GOVERNANCE
16 STAPLES Notice of Annual Meeting of Stockholders
Executive Committee
Ronald L. Sargent
Chairperson
“The Executive Committee provides an opportunity to
leverage the strength and diversity of our Board for guidance
when urgency is needed to act in the best interests of
shareholders.”
Other Committee
Members
Rowland T. Moriarty
Robert C. Nakasone
Robert Sulentic
Vijay Vishwanath
Meetings in 2014
1 telephonic
Introduction
The Executive Committee is authorized to exercise all of the powers of our Board in the management
and affairs of Staples, with certain exceptions. A quorum can only be established by the presence of
both a majority of the members of the Executive Committee and two non-management members of
the Executive Committee.
Key Objective
It is intended that the Executive Committee will take action only when reasonably necessary to
expedite our interests between regularly scheduled Board meetings.
2014 Highlights
The Executive Committee met once during the year, with additional directors in attendance to provide
guidance on the Office Depot acquisition strategy.
RISK OVERSIGHT BY THE BOARD OF DIRECTORS
Our Board of Directors is ultimately responsible for reviewing
and approving our risk management strategy and framework
and key risk parameters. In terms of overseeing the broader
enterprise risk management (“ERM”) program, the Audit
Committee, under powers delegated by the Board, is
responsible for the approval and establishment of our risk
management framework and ensuring that appropriate
policies and practices are in place for risk assessment and
management, including that all risk areas are being monitored
by senior management, reported to the Board or appropriate
Board committee by senior management and addressed as
needed. At each quarterly Board meeting, the Audit Committee
reports to the Board on all of its specific activities.
Our most senior executives are responsible for collaborating
with the Audit Committee to provide oversight to the risk
management process and prioritize and validate key risks.
Management is then responsible for implementing the Board
and Board committee approved risk management strategy and
for developing policies, controls, processes and procedures
to identify and manage risks. In 2014, our Internal Audit
team met with leaders from the functional areas of Staples
to evaluate risks and to coordinate information sharing and
mitigation efforts for all types of risks. The Audit Committee
stays apprised of significant actual and potential risks faced
by Staples and the effectiveness of its risk assessment and
management process in part through detailed presentations
at least twice a year from the Vice President of Internal Audit.
These presentations include an enterprise wide review of the
major financial, operational and legal risks facing the company,
steps that have been taken to monitor and control such
exposures, as well as the methodologies for identifying and
prioritizing financial, operational and legal risks. In addition, the
Audit Committee receives detailed presentations from senior
executives from Global Technology, Merchandising, Human
Resources and other areas to address specific risks and
mitigation strategies. In 2014, as part of the ERM process,
significant attention was given to the Company’s information
security profile. In addition, the Audit Committee was integrally
involved in overseeing the response to the data security
incident announced in 2014. The Audit Committee provides
oversight to management with respect to network security
enhancements and other projects underway by the Global
Technology team.
Independent of the enterprise risk management process, the
Audit Committee is made aware of risks as a result of being
briefed in person regularly by our Vice President of Internal
Audit, as well as an annual briefing and quarterly reports by our
Vice President, Ethics & Compliance. The Audit Committee
also meets regularly with the General Counsel and at least
quarterly, in executive session, alone with the Vice President
of Internal Audit. The Audit Committee uses the results of
its discussions with our Vice President of Internal Audit to
inform its overall view of risk and approve the proposed audit
schedule for the internal audit group. Our internal audit group
identifies, assesses and assists management in addressing
and managing risks by using the Integrated Framework by
the Committee of Sponsoring Organizations of the Treadway
Commission (2013), also known as the COSO framework. Our
Vice President, Ethics & Compliance also provides quarterly
reports to the Audit Committee on compliance and ethics
matters. These reports also are provided to the Board.