Starwood 2012 Annual Report Download - page 19

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.-2013Proxy Statement 13
CORPORATE GOVERNANCE
Overview
Starwood Hotels & Resorts 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 Articles of Incorporation, Bylaws and Amendment to
the Bylaws, Corporate Governance Guidelines, Board of Directors’
Committee Charters, Code of Business Conduct and Ethics,
Finance Code of Ethics, Human Rights Policy, Human Traffi cking
Position Statement, 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 consists of the Chief Executive
Offi cer and President of the Company and ten outside directors,
including the Chairman 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 Offi cer and President of the Company
serve as a member of the Board, as the Chief Executive Offi cer 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. Bruce Duncan currently serves as the
Chairman of the Board of Directors and presides over executive
sessions of non-management directors.
Board Role in Risk Oversight
The Board of Directors regularly receives reports from members
of the Company’s senior management regarding any strategic,
operational, fi nancial, 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 throughout various planning
processes, including 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
annually reviews legal and regulatory risk with the Company’s
General Counsel; and
• the Capital Committee oversees risks related to our hotel
portfolio, capital improvement plans and capital budgets, and
any investments, divestitures, signifi cant 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/
about/investor/governance.html. The Guidelines address signifi cant
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