Staples 2015 Annual Report Download - page 21

CORPORATE GOVERNANCE
www.staplesannualmeeting.com STAPLES 17
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 (2013), also
known as the COSO framework.
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 “CD&A” 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. 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. We
believe that the practices described above facilitate effective
Board oversight of our significant risks.
STRATEGY
At its regularly-scheduled meeting in June of each year, our full
Board reviews the Company’s near- and long-term strategies
in detail. The meeting is typically held off-site and includes
presentations by and discussions with senior management
regarding strategic initiatives. The Board remains involved
in strategic planning throughout the year, engaging with
management to review progress of and challenges to the
Company’s strategy, and to approve specific initiatives.
In 2015, our Board and Committees devoted significant
additional time throughout the year to review and discuss
the Office Depot acquisition, integration planning, strategic
alternatives if the acquisition is not completed, and other
strategic plans. Individual Board committees also consider
strategic matters that fall within their areas of focus, such
as our Finance Committee’s involvement in the financing
arrangements for our transaction with Office Depot, and
report to the full Board at regularly scheduled quarterly
meetings. Our independent directors also meet in regularly
scheduled executive sessions without management present,
at which strategy is discussed.
EVALUATION
We are committed to maintaining an effective Board that
represents the best interests of the Company and our
shareholders. We have an annual director self-evaluation
process administered by our outside counsel to assess
director performance, Board dynamics and the effectiveness
of the Board and its committees. As part of the process, a
written survey is developed with input from the Independent
Lead Director and each Board Committee Chair. Each
director completes the survey and provides suggestions and
feedback to our outside counsel, who then summarizes the
results of the assessment and provides recommendations
for improvements, to our Independent Lead Director and to
each Board Committee Chair. This process allows directors
to anonymously provide feedback on, among other things,
(1) Board information, planning, and oversight, (2) Board
structure and operation, (3) the Board’s relationship with
the CEO and management, (4) Committee structure and
operations, and (5) director qualifications, preparedness and
engagement. The Nominating and Corporate Governance
Committee, as well as the full Board, discusses these
results in executive session and uses them in determining
the appropriate mix and skill set for Board composition and
the nomination process, as well as addressing areas where
the Board feels it can improve.
DIVERSITY
Diversity has always been very important to us. 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. Our Board is
committed to seek out highly qualified women and individuals
from diverse groups to include in the candidate pool of Board
nominees, as reflected in our Guidelines. Additionally, 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
nine new directors to our Board (excluding current nominees).
These new directors, who include three women, one Hispanic,
and two Asians, have strengthened our Board’s diversity of
skills and perspectives. The Board is also provided with an
annual report on diversity initiatives and Staples’ approach and
progress on such initiatives.