Staples 2013 Annual Report Download - page 23

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steps that have been taken to monitor and control such exposures. In doing so, management reviewed its ERM methodologies
for identifying and prioritizing financial, operational and legal risks and discussed the top level risks and related risk management.
Independent of the ERM process, the Audit Committee is made aware of risks as a result of being briefed in person regularly
by our Vice President of Internal Audit, as well as an annual briefing and quarterly reports by our Vice President, Ethics &
Compliance. The Audit Committee also meets regularly with the General Counsel. The Audit Committee also meets at least
quarterly, in executive session alone with the Vice President of Internal Audit. The Audit Committee uses the results of its
discussions with our Vice President of Internal Audit to inform its overall view of risk and approve the proposed audit schedule
for the internal audit group. Our internal audit group identifies, assesses and assists management in addressing and managing risks
by using the Integrated Framework by the Committee of Sponsoring Organizations of the Treadway Commission (1992), also
known as COSO framework. Our Vice President, Ethics & Compliance also provides quarterly reports to the Audit Committee
on compliance and ethics matters. These reports also are provided to the Board.
The Audit Committee administers its risk oversight role through the Board committee structure as well. Each Board
committee is responsible for monitoring and reporting on the material risks associated with its respective subject matter areas of
responsibility. The Audit Committee oversees risks related to our accounting and financial reporting processes and the integrity
of our financial statements, the Finance Committee oversees risks related to capital policies and practices and financial transactions,
the Nominating and Corporate Governance Committee oversees risks related to corporate governance, including director
independence and related party transactions, and as discussed in the “Compensation Discussion and Analysis” section of this proxy
statement, the Compensation Committee oversees risks related to our compensation programs, including an annual review and
risk assessment of the Company's compensation policies and practices for all associates and a risk assessment in connection with
any changes to our compensation program.
In addition, the Board and the Audit Committee receive presentations throughout the year from management regarding
specific potential risks and trends as necessary. This year, the General Counsel provided the Board with a detailed presentation of
the Ethics & Compliance program, policies, oversight and enforcement actions. At each Board meeting, the Chairman and CEO
addresses in a directors only session matters of particular importance or concern, including any significant areas of risk requiring
Board attention. Annually, our full Board reviews in detail the Company's near- and long-term strategies, including consideration
of significant risks facing the Company and their potential impact. We believe that the practices described above facilitate effective
Board oversight of our significant risks.
Diversity
Diversity has always been very important to us. It comprises one of the four pillars of what we call Staples' Soul. We
strive to offer an inclusive business environment that offers diversity of people, thought and experience, as well as diverse suppliers.
This also holds true for our Board of Directors. Although we have no formal separate written policy, pursuant to our Guidelines,
the Board annually reviews the appropriate skills and characteristics of the Board members in light of the current composition of
the Board, and diversity is one of the factors used in this assessment. Not only does the Board view diversity of experience,
industry, skills and tenure as important, but also of gender and ethnic backgrounds. Since 2007, we have added seven new directors
to our Board. These new directors, who include three women, one Hispanic, and one Asian, have strengthened our Board's diversity
of skills and perspectives. We exceed national averages in both women and minority representation on our Board. Additionally,
the Board is provided with an annual report on diversity initiatives and Staples' approach and progress on such initiatives.
Director Candidates
The process followed by the Nominating and Corporate Governance Committee to identify and evaluate director candidates
includes requests to Board members and others for recommendations, engaging a professional recruiting firm to help identify and
recruit potential candidates, meetings from time to time to evaluate biographical information and background material relating to
potential candidates and interviews of selected candidates by members of the Nominating and Corporate Governance Committee
and our Board.
Stockholders may recommend an individual to the Nominating and Corporate Governance Committee for consideration as
a potential director candidate by submitting the following information: (1) the candidate's name; (2) appropriate biographical
information and background materials regarding the candidate; and (3) a statement as to whether the stockholder or group of
stockholders making the recommendation has beneficially owned more than 5% of our common stock for at least a year as of the
date such recommendation is made. Such information should be submitted to the Nominating and Corporate Governance
Committee, c/o Corporate Secretary, Staples, Inc., 500 Staples Drive, Framingham, Massachusetts 01702. Assuming that
appropriate biographical and background material has been provided on a timely basis, the Nominating and Corporate Governance