AutoZone 2011 Annual Report Download - page 15

Proxy
President and Chief Operating Officer of ESL Investments, Inc., which beneficially owns 29.3% of AutoZone’s
outstanding stock. ESL Investments, Inc., with its affiliates, is a substantial stockholder of Sears Holdings
Corporation. During fiscal 2011, Sears Holdings Corporation did business with AutoZone in arm’s length
transactions which were not, individually or cumulatively, material to either AutoZone or Sears Holding
Corporation.
The Board also reviewed donations made by the Company to not-for-profit organizations with which Board
members or their immediate family members were affiliated by membership or service or as directors or
trustees.
Based on its review of the above matters, the Board determined that none of Messrs. Crowley, Graves,
Grusky, McKenna, Mrkonic, Nieto or Ullyot or Ms. Gove has a material relationship with the Company and that
all of them are independent within the meaning of the AutoZone Corporate Governance Principles and
applicable law and listing standards. The Board also determined that Mr. Rhodes is not independent since he is
an employee of the Company and Messrs. Hyde and Rhodes are not independent because they serve on the
boards of not-for-profit organizations which receive more than one percent (1%) of their revenues from the
Company.
Board Leadership Structure
Our Board believes that having a combined Chairman/CEO, independent members and chairs for each of
our Board committees and a Lead Director currently provides the best board leadership structure for AutoZone.
This structure, together with our other corporate governance practices, provides strong independent oversight of
management while ensuring clear strategic alignment throughout the Company. Our Lead Director is a
non-employee director who is elected by the Board. Earl G. Graves, Jr., a director since 2002, currently serves as
our Lead Director.
Our Lead Director:
• Chairs Board meetings when the Chairman is not present, including presiding at all executive sessions of
the Board (without management present) at every regularly scheduled Board meeting;
• Works with management to determine the information and materials provided to Board members;
• Approves Board meeting agendas, schedules and other information provided to the Board;
• Consults with the Chairman on such other matters as are pertinent to the Board and the Company;
• Has the authority to call meetings of the independent directors;
• Is available for direct communication and consultation with major shareholders upon request; and
• Serves as liaison between the Chairman and the independent directors.
Board Risk Oversight
Oversight of risk management is a responsibility of the Board of Directors and is an integral part of the
Board’s oversight of AutoZone’s business. AutoZone’s management takes a variety of calculated risks in order
to enhance Company performance and shareholder value. The primary responsibility for the identification,
assessment and management of the various risks resides with AutoZone’s management. The Board of Directors
is primarily responsible for ensuring that management has established and adequately resourced processes for
identifying and preparing the Company to manage risks effectively. Additionally, the Board reviews the
Company’s principal strategic and operating risks as part of its regular discussion and consideration of
AutoZone’s strategy and operating results. The Board also reviews periodically with the General Counsel legal
matters that may have a material adverse impact on the Company’s financial statements, the Company’s
compliance with laws and any material reports received from regulatory agencies.
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