Office Depot 2011 Annual Report Download - page 48

Board of Directors and Audit Committee
Director Independence
The company’s Board of Directors has determined that nine (9) of the ten (10) directors satisfy the New York
Stock Exchange’s (the “NYSE”) definition of independent Director. Mr. Austrian is not independent. The Board
of Directors believes in strong and independent Directors. The Board of Directors evaluates the independence of
each nominee for election as a Director of our company in accordance with the Corporate Governance
Guidelines, which incorporate the applicable listing standards of the NYSE. The Corporate Governance
Guidelines require that a majority of our Board of Directors must be “Independent” within the meaning of the
NYSE’s listing standards (“Independent Directors”), and all Directors who sit on our Audit Committee (the
“Audit Committee”), Compensation Committee (the “Compensation Committee”) and Corporate
Governance and Nominating Committee, must also be Independent Directors.
All members of our Audit Committee, Compensation Committee and Corporate Governance and Nominating
Committee have been determined by our Board of Directors to be Independent Directors. Our Board of Directors
has reviewed the various relationships between members of our Board of Directors and the company and has
affirmatively determined that none of our Directors has a material relationship with the company that would
impair independence from management, other than Mr. Austrian, who serves as Chairman and Chief Executive
Officer. Our Board of Directors has also determined that Messrs. Bateman, Rubin and Svider are affiliates of the
company due to BC Partners’ stock ownership of the company. The Board of Directors concluded that a
relationship with a shareholder of the company in and of itself does not impair Messrs. Bateman, Rubin and
Svider’s independent judgment in connection with their duties and responsibilities as Directors of the company.
The Board also determined that Mr. Colligan, who serves as a Director of an entity that sells products to the
company, is independent.
As a result, all members of our Board of Directors other than Mr. Austrian, due to his CEO position, have been
determined to be Independent Directors. This determination by our Board of Directors is based upon an
individual evaluation of each of our Directors, his or her employment or Board of Directors affiliations, and a
determination that the Independent Director has no business relationship with our company other than his or her
service on our Board of Directors. None of our Directors serves as an executive officer of a charitable
organization to which we made contributions during 2011.
Board of Directors’ Role in Risk Oversight
Our Board of Directors has an active role in overseeing management of the company’s risks, directly and through
its Committees. The Board oversees a formal enterprise-wide approach to risk management, designed to support
the achievement of organizational objectives, including strategic objectives, to improve long-term organizational
performance and enhance shareholder value. A fundamental part of risk management is not only understanding
the risks a company faces and what steps management is taking to manage those risks, but also understanding
what level of risk is appropriate for the company. The involvement of the full Board of Directors in setting the
company’s business strategy is a key part of its assessment of management’s appetite for risk and also a
determination of what constitutes an appropriate level of risk for the company. The full Board of Directors
participates in an annual enterprise risk management assessment, which is led by the company’s Chief
Compliance Officer. In the company’s continuing risk assessment process, risk is assessed quarterly by a
Steering Committee (the “Steering Committee”), comprised of members of management representing our
business units and corporate staff. This Steering Committee focuses on identifying and evaluating company-wide
risks in four primary areas: financial risk, legal/compliance risk, operational/strategic risk and compensation risk.
This company-wide risk portfolio is then presented to and evaluated by the Operating Committee, made up of our
Chief Executive Officer, Executive Vice President & Chief Financial Officer, Business Unit Presidents,
Executive Vice President & Chief Marketing Officer, Executive Vice President & Chief Merchandising Officer,
Executive Vice President of Human Resources, and our Executive Vice President & General Counsel
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