Governance

GOVERNANCE

The Walt Disney Company believes good Board governance is integral to achieving long-term shareholder value. We are committed to governance policies and practices that assure shareholder interests are represented in a thoughtful and independent manner. In pursuit of this commitment, our Corporate Governance Guidelines have established the policy that a substantial majority of directors be independent of the Company and of the Company's management. The guidelines also establish independence standards that meet, and in some cases exceed, the listing standards of the New York Stock Exchange. Currently, ten of the 13 members of the Company's Board of Directors have been determined by the Board to be independent pursuant to these standards, including the Chairman of the Board.

The guidelines also encourage Board membership that reflects the diversity of our shareholders, employees, customers, guests and communities. Currently four members of our Board are women, one is African-American, one is Hispanic-American, and one is Asian-American.

The Board of Directors monitors trends in governance practices to assure that it continues to meet its commitment to thoughtful and independent representation of shareholder interests. The Board has adopted a number of practices that strengthen its ability to meet this goal, including elimination of a classified board, establishment of strict independence requirements, adoption of the requirement that a substantial majority of the directors be independent of management, use of an independent chairman of the Board as appropriate, majority election of directors, and holding of regular executive sessions of the Board without management present.

The Board has established committees to facilitate and assist in the execution of the Board's responsibilities. The three most important Committees — the Audit Committee, the Compensation Committee and the Governance and Nominating Committee — are comprised entirely of independent directors. The Company posts the charters of each of these three committees (as well as that of the Executive Committee, which serves primarily as a means of taking action that formally requires Board approval between regularly scheduled meetings of the Board) on our investor relations website.

In order to promote and maintain high ethical standards and legal compliance, the Company has adopted Standards of Business Conduct that set forth ethical standards of responsibility to guests, customers, cast members and employees, shareholders, other businesses, and the communities in which we operate, as well as identifying specific legal compliance matters. These standards are applicable to every officer and employee of the Company and we require regular training to promote compliance with the Standards. The Board of Directors has also adopted a separate Code of Business Conduct and Ethics for Directors, which contains provisions specifically applicable to directors of the parent Company.

Additional details regarding our governance structures and policies are available at the Corporate Governance section of our corporate website and in our annual proxy statement.

Participation in the Formulation of Public Policy

Because many national and local public policy decisions affect our businesses, the Company believes that active participation in the political life of the countries and communities in which we do business is in the best interests of the Company and its shareholders. As a result, we participate in policy debates on many issues to support the Company's positions, and, where permitted by law and deemed appropriate by management, we contribute to candidates for public office and related organizations. A wide array of issues is of interest to the Company. Examples include: protection of intellectual property; broadcast, cable and internet regulation; freedom of expression; free and fair trade; travel and tourism; privacy; and economic development including appropriate taxation.

Our political activity is carried out in compliance with applicable laws and reporting requirements.

We did not contribute corporate funds in 2010 to candidates for federal offices or organizations created to support candidates for federal office. Where permitted by applicable law, we contribute corporate funds to state and local political parties, candidates for state and local office, organizations that promote such candidates or positions on state and local issues and state and local ballot initiatives. Our contributions are made on the basis of our objectives and policy priorities and not on the basis of the partisan affiliation of the candidate or organization.

Our Company has formed a federal political action committee, which accepts voluntary contributions from employees and in turn makes contributions to candidates for federal offices. Like contributions of corporate funds, contributions by the political action committee are allocated on the basis of our objectives and policy priorities and not on the basis of the partisan affiliation of the candidate or organization. Contributions to candidates are split evenly between candidates for the two major parties.

In pursuit of the goals described above, we made contributions directly or through our political action committee to candidates, partisan parties, and organizations that promote candidates or positions on issues and ballot initiatives totaling $3.6 million in the United States in calendar 2010. We also participate in a variety of industry associations and similar organizations that devote a portion of their revenue, which may include contributions from the Company, to support candidates, organizations or positions on issues, though we have no direct control over how those expenditures are directed and may not concur with the position of the organization on any given candidate or issue.

Employees are free to exercise the right to make personal political contributions within legal limits unless such a contribution is prohibited by policies of the Company.

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