SanDisk 2010 Annual Report Download - page 24

Board Leadership Structure and Risk Oversight
Board Leadership Structure
Mr. Marks has served as the Chairman of the Board since January 1, 2011. Dr. Harari served as the
Chairman of the Board and Chief Executive Officer for all of 2010 until his retirement on December 31, 2010.
Mr. Federman serves as the Vice Chairman and Lead Independent Director of the Board. Each of the current
Directors, other than Mr. Mehrotra, is independent and the independent Directors have regular executive
sessions. Following an executive session of independent Directors, one or more of the attending Directors may:
(1) act as a liaison between the independent Directors and management regarding any specific feedback or issues;
(2) provide management with input regarding agenda items for Board and Committee meetings; and
(3) coordinate with management regarding information to be provided to the independent Directors in performing
their duties. The Board believes that this approach appropriately and effectively complements the Company’s
current leadership structure.
Through December 31, 2010, the Company’s Chief Executive Officer also served as the Chairman of the
Board. The Board believed that the combination of those roles was appropriate, because of the Chief Executive
Officer’s long-standing role with the Company. Following the retirement of Dr. Harari, the Board determined
that it would be in the Company’s best interests to separate the Chairman of the Board and the Chief Executive
Officer positions because it allows the newly-appointed Chief Executive Officer to focus on the Company’s
day-to-day business, while allowing the Chairman of the Board to lead the Board in its fundamental role of
providing advice to and independent oversight of management. Further, the Board recognizes the time, effort,
and energy that the Chief Executive Officer is required to devote to his position, as well as the commitment
required to serve as the Company’s Chairman, particularly as the Board’s oversight responsibilities continue to
grow. The Company’s Corporate Governance Principles do not establish this approach as a policy, but as a
matter that is considered from time-to-time.
Under its charter, the Nominating and Governance Committee periodically reviews the performance of the
full Board, which includes the functionality of the Board’s leadership structure.
Board Role in Risk Oversight
The Board is actively involved in the oversight of risks that could affect the Company. This oversight is
conducted at the Board level and, where relevant to a committee’s duties, through the committees of the Board.
While the Board and its committees oversee risk management strategy, management is responsible for
implementing and supervising day-to-day risk management processes. The Company believes this division of
risk management responsibilities is the most effective approach for addressing the risks that the Company faces.
Consideration of Director Nominees
Identifying and Evaluating Nominees for Directors
The Nominating and Governance Committee initiates the director nomination process by preparing a slate
of potential candidates who, based on their qualifications and other information available to the Nominating and
Governance Committee, appear to meet the criteria specified below and/or who have specific qualities, skills or
experience being sought (based on input from the full Board). The Nominating and Governance Committee may
engage a third-party search firm or other advisors to assist in identifying prospective nominees. The nomination
of existing Directors is not automatic, but is based on continuing qualification under the criteria set forth below
and the Corporate Governance Principles of the Company. Under the Company’s Corporate Governance
Principles, the number of officers or employees of the Company serving at any time on the Board should be
limited such that, at all times, a majority of the Directors is “independent” under applicable SEC and stock
exchange rules.
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