SanDisk 2011 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. Mr. Mehrotra has served as
Chief Executive Officer of the Company since January 1, 2011 and as a Director since July 2010. The Board
believes that it is in the Company’s best interests to maintain a separation of the Chairman of the Board and the
Chief Executive Officer roles because it allows the Chief Executive Officer of the Company 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 fixed policy, but as a
structure that is considered from time to time.
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.
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. In addition, the Audit Committee conducts
quarterly reviews with management on the Company’s enterprise risk assessment and mitigation processes and
assists the Board with its oversight and annual review of the Company’s enterprise risk management. 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 desirable qualities,
skills or experience (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 and 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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