Starwood 2009 Annual Report Download - page 59

The Company has adopted a policy which requires the Audit Committee of the Board of Directors to approve
the hiring of any current or former employee (within the last 5 years) of the Company’s independent registered
public accounting firm into any position (i) as a manager or higher, (ii) in its accounting or tax departments,
(iii) where the hire would have direct involvement in providing information for use in its financial reporting
systems, or (iv) where the hire would be in a policy setting position. When undertaking its review, the Audit
Committee considers applicable laws, regulations and related commentary regarding the definition of “indepen-
dence” for independent registered public accounting firms.
Pre-Approval of Services
The Audit Committee pre-approves all services, including both audit and non-audit services, provided by the
Company’s independent registered public accounting firm. For audit services (including statutory audit engage-
ments as required under local country laws), the independent registered public accounting firm provides the Audit
Committee with an engagement letter outlining the scope of the audit services proposed to be performed during the
year. The engagement letter must be formally accepted by the Audit Committee before any audit commences. The
independent registered public accounting firm also submits an audit services fee proposal, which also must be
approved by the Audit Committee before the audit commences. The Audit Committee may delegate authority to
one of its members to pre-approve all audit/non-audit services by the independent registered public accounting firm,
as long as these approvals are presented to the full Audit Committee at its next regularly scheduled meeting.
Management submits to the Audit Committee all non-audit services that it recommends the independent
registered public accounting firm be engaged to provide and an estimate of the fees to be paid for each. Management
and the independent registered public accounting firm must each confirm to the Audit Committee that the
performance of the non-audit services on the list would not compromise the independence of the registered public
accounting firm and would be permissible under all applicable legal requirements. The Audit Committee must
approve both the list of non-audit services and the budget for each such service before commencement of the work.
Management and the independent registered public accounting firm report to the Audit Committee at each of its
regular meetings as to the non-audit services actually provided by the independent registered public accounting firm
and the approximate fees incurred by the Company for those services.
All audit and permissible non-audit services provided by Ernst & Young to the Company for the fiscal years
ended December 31, 2009 and 2008 were pre-approved by the Audit Committee or our Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All members of the Compensation Committee during fiscal year 2009 were independent Directors, and no
member was an employee or former employee. No Compensation Committee member had any relationship
requiring disclosure under “Certain Relationships and Related Transactions,” below. During fiscal year 2009, none
of our executive officers served on the compensation committee (or its equivalent) or board of directors of another
entity whose officer served on our Compensation Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Policies of the Board of Directors of the Company
The Board has adopted a Corporate Opportunity Policy, the purpose of which is to address the reporting,
review and approval or ratification of transactions with Directors and executive officers and their affiliates. As a
general matter, we seek to avoid related person transactions because they can involve potential or actual conflicts of
interest and pose the risk that they may be, or be perceived to be, based on considerations other that the Company’s
best interests. However, we recognize that in some circumstances transaction between us and related persons may
be incidental to the normal course of business or provide an opportunity that is in the best interests of the Company,
or that is not inconsistent with the best interests of the Company and where it is not efficient to pursue an alternative
transaction. The Board has charged the Corporate Governance and Nominating Committee (the “Governance
Committee”) with establishing and reviewing (on a periodic basis) our Corporate Opportunity Policy. A copy of the
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