Corporate governance at Microsoft serves several purposes:
Establish and preserve management accountability to Microsoft's owners by appropriately distributing rights and responsibilities among Microsoft Board members, managers, and shareholders.
Provide a structure through which management and the Board set objectives and monitor performance.
Strengthen and safeguard our culture of business integrity and responsible business practices.
Encourage the efficient use of resources, and to require accountability for stewardship of those resources.
Shareholders elect the Board to oversee management and to assure that shareholder long-term interests are served. Through oversight, review, and counsel, the Board establishes and promotes Microsoft's business and organizational objectives. The Board oversees the Company's business affairs and integrity, works with management to determine the Company's mission and long-term strategy, performs the annual Chief Executive Officer evaluation, oversees CEO succession planning, establishes internal control over financial reporting, and assesses company risks and strategies for risk mitigation.
Accountability makes us a stronger company, more responsive and better aligned for success. Microsoft actively engages on governance issues with a wide range of shareholders, and is a leader in adopting standards to increase shareholder accountability, including majority voting for Board directors, Say-on-Pay advisory votes on executive compensation, and has adopted a proxy access for director nominations right that permits eligible shareholders to nominate candidate of their choosing for election to the Microsoft Board.
Microsoft believes that effective corporate governance should include regular, constructive conversations with our shareholders. We actively engage with our shareholders as part of our annual corporate governance cycle. An important component of transparency is communicating governance policies and practices to all shareholders and other stakeholders. With over 3.5 million Microsoft shareholders, both direct dialogue and ‘one-to-many’ communications are necessary to provide the scale to reach all shareholders.
Policies and Guidelines
The Board of Directors has developed a corporate governance framework to help it fulfill its responsibilities to shareholders. Our governance policies are memorialized in guidelines to assure that the Board will have the authority and practices in place to review and evaluate the Company's business operations and to make decisions that are independent of the Company's management. The Board routinely reviews evolving practices to determine those that will best serve the interests of our shareholders.