As amended by
the Board of Directors in March 2011
Corporate Governance Guidelines have been adopted by the Board of Directors
(the “Board”) of Barnes & Noble, Inc. (the “Company”) to provide a
framework for the governance of the Company and to assist the Board in the
exercise of its responsibilities to the Company and its stockholders.
These guidelines should be interpreted in the context of all applicable
laws and the Company’s Certificate of Incorporation, By-laws and other
corporate governance documents. These guidelines are intended to
provide a set of flexible guidelines for the effective functioning of the
Board. The Board will review these guidelines and other aspects of
the Company’s governance periodically and may modify or amend these
guidelines and the authority and responsibilities of the Board set forth in
these guidelines at any time.
The Role of the Board of Directors
Direct the Affairs of the Company for the Benefit of Stockholders
The primary responsibility of directors of the Company is to oversee the
affairs of the Company for the benefit of stockholders. The Board
agrees that day-to-day management of the Company is the responsibility of
management and that the role of the Board is to oversee management's
performance of that function. The Board shall also mandate and
administer a corporate compliance program, which shall include the creation
of a Company Code of Business Conduct and Ethics, the maintenance of
accounting, financial and other controls, and the review of the adequacy of
Long Range Strategy Development
Long range strategic issues should be discussed as a matter of course at
regular Board meetings.
Review of Financial Goals and Performance
The Board reviews the annual operating plan and specific goals at the start
of the fiscal year and financial performance quarterly (actual and in
comparison to plan). The Board also believes it is important to
establish and evaluate both short and longer term objectives.
Ethical Business Environment
The Board insists on an ethical business environment that focuses on
adherence to both the letter and the spirit of regulatory and legal
mandates. The Board expects that management will conduct operations
in a manner supportive of this view and in adherence to the policies
comprising the Company’s Code of Business Conduct and Ethics. The
Board is committed to avoiding any transactions that compromise, or appear
to compromise, director independence.
CEO’s Performance Evaluation
The CEO’s performance shall be evaluated annually by the Compensation
Committee as a regular part of any decision with respect to the CEO’s
The Board is responsible for succession planning. The Board will have
the CEO annually review with the independent directors the abilities of the
senior executives and their likely successors. Additionally, the
independent directors may meet periodically to discuss, among other things,
management succession issues.
Periodic Review of These Guidelines
The operation of the Board is a dynamic and evolving process.
Accordingly, these guidelines will be reviewed periodically by the
Corporate Governance & Nominating Committee and any recommended
revisions will be submitted to the full Board for consideration.
Meetings of the Board of Directors
The Chairman of the Board shall be selected by the Board in the manner that
it determines to be in the best interests of the Company and its
stockholders. Currently, the positions of Chairman and CEO are
separate. In addition, the independent members of the Board have
appointed an independent director to serve as lead director for a period of
at least one year. The lead director (i)
acts as a liaison between the independent directors and the Company’s
management, (ii) presides at the executive sessions of non-management and
independent directors, and has the authority to call additional executive
sessions as appropriate, (iii) chairs Board meetings in the Chairman’s
absence, (iv) coordinates with the Chairman on agendas and schedules for
Board meetings, and information sent to the Board, reviewing and approving
these as appropriate, and (v) is available for consultation and
communication with major stockholders as appropriate.
Frequency of Meetings
The Board will meet at least one time each quarter and in conjunction with
the annual meeting of stockholders. The Board believes that the
specific number of Board meetings should vary with circumstances and that special meetings should be called as necessary.
While the Board
recognizes that directors discharge their duties in a variety of ways,
including personal meetings and telephone contact with management and
others regarding the business and affairs of the Company, the Board feels
it is the responsibility of individual directors to make themselves
available to attend both regular and special Board and committee meetings
on a consistent basis.
Non-management directors meet in executive sessions at every regularly
scheduled quarterly Board meeting, and such other times as are necessary or
advisable. In addition, the independent directors meet at least
once a year in an executive session of only independent directors.
The lead director is responsible for presiding at the executive sessions.
Access to Management and Outside Experts
Board members shall have reasonable direct access to the Company’s officers
and employees. The Board or a Board committee may seek legal,
financial or other expert advice from a source independent of
management. Board members will use judgment to ensure that contact
with the Company’s officers or employees is not distracting to the business
operation of the Company and that such contact, if in writing, be copied to
Attendance of Non-Directors at Meetings
The Chairman has discretion to invite any members of management that the Chairman
deems appropriate to attend Board meetings at appropriate times, subject to
the Board's right to request that such attendance be limited or
discontinued. At the Board's request, non-management guests shall
sign a confidentiality agreement in form satisfactory to the Company prior
to such guest's participation in any Board or committee meeting. The
Board and committees may exclude any guest from part or all of any meeting
upon its determination that it is in the best interests of the Company to
Agendas and Presentations
The Chairman and the lead director shall coordinate to establish the agenda
for each Board meeting, taking into account suggestions of Board
members. Board members may include particular items on the agenda by
contacting the Chairman or the lead director, who customarily ask directors
for their suggestions or opinions on possible agenda items before each
The process of
preparing the agenda includes determining the form of each presentation to
the Board and the person to make such presentation. Each meeting
should include reports from the Board committees, as appropriate.
It is the policy of
the Board that the Chief Financial Officer or other senior financial officer give a presentation on the financial and operating
results of the Company and related issues at each regular Board meeting.
Information relevant to the Board's understanding of matters to be
discussed at an upcoming Board meeting generally is distributed in writing
or electronically to Board members in advance, whenever feasible and
appropriate. This will help facilitate the efficient use of meeting
time. In preparing this information, management should ensure that
the materials distributed are as concise as possible, yet give directors
sufficient information to make informed decisions. The Board
acknowledges that certain items to be discussed at Board meetings are of an
extremely sensitive nature and that the distribution of materials on these
matters prior to Board meetings may not be appropriate.
periodically reviews the information flow to Board members to ensure that
directors receive the right kind and amount of information in sufficient
time to prepare for meetings. The lead director coordinates with the
Chairman regarding information flow to the directors, periodically
discussing director satisfaction of Board materials with individual
directors and encouraging directors to offer suggestions on
materials. In addition, this topic shall be considered annually by
the Corporate Governance & Nominating Committee as part of its regular
review of Board performance.
The Chief Financial Officer shall be responsible for providing an
orientation for new directors, which will include comprehensive information
about the Company’s business and operations; general information about the
Board and its committees, including a summary of director compensation and
benefits; and a review of director duties and responsibilities.
Director Continuing Education
Each director is expected to maintain the necessary level of expertise to
perform his or her responsibilities as a director. The Company may,
from time to time, offer continuing education programs to assist the
directors in maintaining such level of expertise.
Composition of Board
The majority of the members of the Board shall be independent
directors. Independent directors should have appropriate skills and
characteristics required of Board members.
The Board is
committed to diversified membership. The Board will not discriminate
on the basis of race, color, national origin, gender, religion or
disability in selecting nominees.
Definition of Independent Director
The Board defines an "independent director" as a director that
meets the independence requirements of the New York Stock Exchange and the
rules and regulations promulgated by the Securities and Exchange
Commission. In addition, for a director to be deemed an independent
director, the Board must affirmatively determine that the director has no
material relationship with the Company and the basis for the determination
will be disclosed in the Company’s annual proxy statement. To
evaluate "independence," the Board may consider all relevant
Size of the Board
The Board believes that the Board should not be too large and understands
that the size of the Board will fluctuate from time to time depending on
circumstances. The Corporate Governance & Nominating Committee
will make recommendations regarding increasing or decreasing the size of
the Board from time to time.
Director Retirement Age and Term Limits
The Board believes that consistent quality in the directorship can be
achieved effectively without term limits or any mandatory retirement age.
The Corporate Governance & Nominating Committee nominates candidates
for election to the Board. It is the Corporate Governance &
Nominating Committee's responsibility to make director recommendations to
the full Board for appointments to fill vacancies of any unexpired term on
the Board and to recommend nominees for submission to stockholders for
approval at the time of the annual meeting of stockholders. The
chairman of the Corporate Governance & Nominating Committee will extend
the offer to a new director candidate to serve on the Board.
The Company does not
set specific criteria for directors except to the extent required to meet
applicable legal, regulatory and stock exchange requirements, including,
but not limited to, the independence requirements of the New York Stock
Exchange and the Securities and Exchange Commission. Nominees for
director will be selected on the basis of outstanding achievement in their
personal careers; board experience; wisdom; integrity; ability to make
independent, analytical inquiries; understanding of the business
environment; and willingness to devote adequate time to Board duties.
The Board believes that each director should have a basic understanding of
(i) the principal operational and financial
objectives and plans and strategies of the Company, (ii) the results of
operations and financial condition of the Company and of any significant
subsidiaries or business segments, and (iii) the relative standing of the
Company and its business segments in relation to its competitors.
The Board believes it is appropriate to annually review its own performance
and for each Board committee to review its own performance. The
Corporate Governance & Nominating Committee will oversee the annual
self-evaluations and report to the Board and its committees the results of
its analysis and any recommendations following each such review. All
directors are free to make suggestions on improvement of the Board’s practices
at any time and are encouraged to do so.
Director Compensation and Stock Ownership
The Board believes that the level of director compensation generally should
be competitive with that paid to directors of other corporations of similar
size and profile in the United States. The Compensation Committee is
responsible for making recommendations for the full Board's review and
approval with respect to director compensation and benefit programs.
The Board believes
that directors should have a financial interest in the Company.
Accordingly, directors receive a significant portion of their compensation
in the form of equity-based compensation.
Outside Board Service
Directors may not serve on the boards of more than five other companies in
addition to the Company's Board. Service on the boards of subsidiary
companies, non-profit organizations and non-public for-profit organizations
is not included in this calculation. Moreover, if a director sits on
several mutual fund boards within the same fund family, it will count as
one board for purposes of this calculation. Directors should obtain
approval from the Audit Committee prior to accepting other board membership
at for-profit organizations.
Committees of the Board
Number and Types of Committees
The Board believes that committees should be created and disbanded
depending on the particular interests of the Board, issues facing the
Company and legal requirements. The current "standing" committees
of the Board (that is, committees expected to operate over an extended
period) are the Audit Committee, the Compensation Committee, and the
Corporate Governance & Nominating Committee. The Corporate
Governance & Nominating Committee shall periodically recommend changes
to the composition of the Board committees. Directors are free to
make suggestions regarding committees at any time and are encouraged to do
so. The Board also expects that the committee structure will be one
of the matters considered from time to time as part of the review of
overall Board effectiveness. The composition, members and
responsibilities will also be defined periodically.
Members of the Audit Committee, Compensation Committee, and Corporate
Governance & Nominating Committee shall meet the independence
requirements of the New York Stock Exchange and the rules and regulations
promulgated by the Securities and Exchange Commission. Additionally,
members of the Audit Committee shall meet the financial sophistication
requirements of the New York Stock Exchange. The Board will annually
evaluate such financial sophistication and will determine whether any
member of the Audit Committee may be deemed an "audit committee
financial expert," as defined under the rules and regulations of the Securities
and Exchange Commission.
Frequency of Committee Meetings
Management will generally recommend an annual committee meeting schedule
for all standing committees, but it is the responsibility of committee
chairpersons, in consultation with committee members, to determine the
frequency and length of committee meetings. The Audit Committee will
meet at least quarterly.
Committee chairpersons, in consultation with appropriate members of
management and committee members, shall determine committee agendas.
Reports of committee meetings are submitted to
the full Board following each committee meeting. Committee
chairpersons are offered the opportunity to comment or report on committee
activities at each Board meeting.
Specific Roles and Responsibilities
The specific roles and responsibilities of each committee are outlined in
their respective charters.