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 Governance
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Governance
Last updated 3/26/08
Gap Inc. was founded in 1969 on the principle of conducting our business in a
responsible, honest and ethical manner. For us, good corporate governance
means going beyond compliance. It means taking a leadership role in
instituting and maintaining practices that represent strong business ethics —
and ensuring we communicate consistently with our shareholders, customers and
neighbors around the world.
We are committed to continually evolving and adopting appropriate corporate
governance best practices. Gap Inc.'s Corporate Governance Guidelines were
most recently updated in March 2008.
Please see the Corporate
Governance Guidelines for additional information.
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Highlights
Audit Firm Lead Partner Rotation
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Gap Inc. rotates the lead partner of its independent auditor, Deloitte &
Touche, so that he or she will not perform audit services for more than five
consecutive fiscal years. A new lead partner assumed audit responsibility
during the first quarter of 2006.
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Shareholder Authority
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At an uncontested election, any nominee for director who receives a greater
number of votes "withheld" from his or her election than votes "for" such
election shall submit to the company an offer letter of resignation, subject
to board acceptance. The Governance, Nominating and Social Responsibility
Committee will consider the offer of resignation. The board shall act promptly
with respect to each such letter of resignation. The board's decision would be
disclosed publicly.
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Gap Inc. does not have a classified board; directors are elected annually.
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Shareholders can act by written consent; holders of 10 percent of Gap Inc.
shares can call special meetings of the shareholders.
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Board Independence
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A majority of Gap Inc.'s board members are independent of the company and its
management, and we are committed to maintaining at least two-thirds of
independent directors. Currently, our board has 13 directors, nine of whom are
independent.
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At every board meeting, time is set aside for the independent directors to
meet in executive session.
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Lead Independent Director
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Since 2003, Gap Inc.'s independent directors have appointed a Lead Independent
Director.
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Board Committees
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Only independent directors sit on Gap Inc.'s three board committees.
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Two members of our Audit and Finance Committee are "audit committee financial
experts" under SEC rules.
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Board Engagement
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Gap Inc. directors must make a significant time commitment when they join our
board. The full board meets every other month, which provides continuity. In
addition, board members often work with management outside of formal meetings.
They also participate in an extended two-day strategy meeting each year.
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Board members who are full-time employees of other companies should not serve
on more than three public company boards at one time, and directors who are
retired from full-time employment should not serve on more than five public
company boards.
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All board members are expected to complete a formal onboarding program within
six months of joining.
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Board Quality
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Gap Inc. is committed to maintaining an active, engaged board. Qualified
candidates for the board are interviewed by the Chairman and CEO, at least two
independent directors and members of management, as appropriate.
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The Governance, Nominating and Social Responsibility Committee is responsible
for the review and assessment of the composition and overall performance of
the board and each director. As part of this process, each board member must
participate in and complete an extensive annual performance evaluation,
including individual peer assessments, in order to be nominated for annual
re-election.
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Hedging Policy
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Board members are prohibited from speculating in or hedging their ownership of
the Company's stock, including the use of short sales, "sales against the
box," "cashless collars," forward sales, equity swaps and other similar or
related arrangements.
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Contact the Board
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Anyone may communicate governance matters directly to the Gap Inc. Board of
Directors by emailing board@gap.com.
Communications will be received and reviewed by our Chairman and our Lead
Independent Director, as well as our Corporate Secretary's Office. Matters may
be referred to the entire board, board committees, individual members and
other departments within the company.
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Anyone may communicate compliance matters, including suspected violations of
our Code of Business
Conduct or accounting, internal accounting controls or auditing
concerns, confidentially to the Corporate Compliance department by emailing corporate_compliance@gap.com
or by calling our Code
Hotline. Accounting, auditing and other significant concerns are referred
by the Corporate Compliance department to the Audit and Finance Committee.
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