US Bank 2002 Annual Report Download - page 7

U.S. Bancorp 5
Governance
Corporate
Good corporate governance promotes
ethical business practices, demands
meticulous accounting policies and
procedures, and includes a structure
with effective checks and balances.
Corporate governance is vital to the
continued success of U.S. Bancorp and
the entire financial services industry.
Our ethical standards have rewarded
us with an enviable reputation in today’s
marketplace —a marketplace where
trust is hard to earn. Our shareholders,
customers, communities and employees
demand —and deserve —to do business
with companies they can trust.
U.S. Bancorp operates with
uncompromising honesty and integrity.
Our Board of Directors has had a
Corporate Governance Committee for
many years. We have adopted new
Corporate Governance Guidelines in
response to today’s heightened concern.
Our Corporate Governance Guidelines
are available for you to view on our
Internet web site at usbank.com.
Following are some of the important
elements of our Corporate Governance
practices.
Independent Oversight
Our Audit Committee is composed
entirely of independent outside direc-
tors. In addition, the Board, the Audit
Committee and the other committees of
the Board meet in “executive session”
without management in attendance at
every meeting. The presiding director at
every executive session of the Board
is an independent director. The Board
and each committee also have express
authority to engage outside advisors to
provide additional independent expertise
for their deliberations.
Board of Directors’ Focus
on U.S. Bancorp
To ensure that our directors are able
to focus effectively on our business, we
limit the number of other public com-
pany boards a director may serve on
to three. The Chairman, President and
Chief Executive Officer of U.S. Bancorp
serves on only two other public
company boards. Audit Committee
members may serve on no more than
three other public company audit
committees, and the chairman of the
Audit Committee serves on no other
audit committees.
Board of Directors’ Knowledge
and Expertise
All of our directors are skilled business
leaders. Directors are encouraged to
attend continuing director education
seminars in order to keep a sharp focus
on current good governance practices.
In addition, the Board and each commit-
tee have express authority to retain
outside advisors.
The Board and each committee
perform annual self-evaluations in order
to assess their performance and to ensure
that the Board and committee structure
is providing effective oversight of
corporate management. You may review
the charters of each of our Board
committees on our Internet web site
at usbank.com.
Management’s Vested Interest
in U.S. Bancorp
We understand clearly that U.S. Bancorp
shareholders are the primary beneficiar-
ies of management’s actions. All
U.S. Bancorp executive officers and
directors own shares of company stock,
and in order to further emphasize the
alignment of management’s interests
with those of our shareholders, we have
established stock ownership guidelines
for our executive officers.
Disclosure Controls
We have established rigorous procedures
to ensure that we provide complete and
accurate disclosure in our publicly filed
documents. We have also established
a telephone hotline for employees to
anonymously submit any concern they
may have regarding corporate controls
or ethical breaches. Management
investigates all complaints and directs
to our Audit Committee any relating to
concerns about our financial statements
or public disclosures.
Shareholder Approval of
Equity Compensation Plans
All equity compensation plans under
which future grants may be made have
been shareholder approved. In addition,
no options issued under any current
plans have been repriced.
U.S. Bancorp Code of Ethics
and Business Conduct
Each year, we reiterate the vital
importance of our Code of Ethics and
Business Conduct. The Code applies to
directors, officers and all employees,
who must certify annually their compli-
ance with the standards of the Code.
The content of the Code is based not
solely on what we have the right to do,
but, even more importantly, on what is
the right thing to do. Our standards are
higher than any legal minimum because
our business is built on trust. You may
review our Code of Ethics and Business
Conduct on our Internet web site
at usbank.com. Click on About
U.S. Bancorp and then on Ethics
at U.S. Bank.