Starwood 2011 Annual Report Download - page 16

CORPORATE GOVERNANCE
Overview
Starwood Resorts & Hotels Worldwide, Inc. is committed to maintaining the highest standards of corporate
governance and ethical business conduct across all aspects of its operations and decision-making processes.
Important documents governing our corporate governance practices include our Charter, Bylaws, Corporate
Governance Guidelines, Board of Directors Committee Charters, Finance Code of Ethics, Code of Business
Conduct and Ethics and Corporate Opportunity and Related Person Transaction Policy. These documents can be
accessed on our website at www.starwoodhotels.com and are discussed in more detail below.
Board Leadership Structure
Our board leadership structure currently consists of a Chairman (who is not the Chief Executive Officer and
President of the Company), the Chief Executive Officer and President of the Company, nine outside directors and
four committee Chairs. The Board of Directors believes that having a separate independent director serve as
Chairman promotes clear, independent board leadership and engagement. The Board of Directors also believes it
is well served by having the Chief Executive Officer and President of the Company serve as a member of the
Board, as the Chief Executive Officer and President of the Company has primary responsibility for managing the
Company’s day-to-day operations and, consequently, a unique understanding of the Company’s operations, and
the hotel and leisure industry generally.
Board Role in Risk Oversight
The Board of Directors regularly receives reports from members of the Company’s senior management
regarding any strategic, operational, financial, legal, regulatory or reputational risk that the Company may be
facing. The Board of Directors then reviews management’s assessment, discusses options for mitigating any such
risk with management, and directs management to manage and minimize the Company’s exposure. Management
is ultimately responsible for identifying any such risk, and for developing and implementing mitigation plans
during the strategic planning process. The Board’s role is one of oversight. The Board’s committees assist it with
the risk oversight function as follows:
• the Audit Committee oversees the Company’s controls and compliance activities and oversees
management’s process for identifying and quantifying risks facing the Company;
• the Compensation and Option Committee oversees risk associated with our compensation policies and
practices and structures the Company’s incentive compensation in a way that discourages the taking of
excessive risks;
• the Corporate Governance and Nominating Committee oversees Board processes and corporate
governance-related risk; and
• the Capital Committee oversees risks related to our hotel portfolio, capital improvement plans and capital
budgets, and any investments, divestitures, significant asset sales, mergers and acquisitions and other
extraordinary transactions.
Corporate Governance Policies
In addition to our Charter and Bylaws, we have adopted the Corporate Governance Guidelines (the
“Guidelines”), which are posted on our website at www.starwoodhotels.com/corporate/investor_relations.html.
The Guidelines address significant corporate governance matters and provide the framework for the Company’s
corporate governance policies and practices including: board and committee composition, director and executive
ownership guidelines, incentive recoupment and anti-hedging policies, and board and committee assessment. The
Corporate Governance and Nominating Committee is responsible for overseeing and reviewing the Guidelines
and for reporting and recommending to the Board of Directors any changes to the Guidelines.
6