Governance

The Walt Disney Company believes that good governance is integral to achieving long-term shareholder value. The company is committed to governance policies and practices that assure shareholder interests are represented in a thoughtful and independent manner. In pursuit of this commitment, the company's 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, nine of the 12 members of the company's Board of Directors have been determined by the Board to be independent pursuant to these standards.

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 (currently nine out of 12) be independent of management, and holding of regular executive sessions of the Board without management present. In addition, the Board's Compensation Committee adopted a policy setting out the requirements for determining that the executive compensation consultant to the Committee is independent of management.

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 its 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 and customers, Cast Members and employees, the company and its shareholders, other businesses and the communities in which the company operates, as well as identifying specific legal compliance matters. These standards are applicable to every officer and employee of the company, and the company requires 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.

Public Policy

Because many national and local public policy decisions affect its businesses, the company believes that active participation in the political life of the countries and communities in which it does business is in the best interests of the company and its shareholders. As a result, the company participates in policy debates on many issues to support the company's positions, and, where permitted by law and deemed appropriate by management, contributes to candidates for public office and related organizations.

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

The company does not contribute corporate funds 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 public 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 public policy priorities and not on the basis of the partisan affiliation of the candidate or organization.

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.

In addition, our International Labor Standards group interacts and collaborates with key governmental bodies internationally on broad-based efforts to improve factory working conditions. To read more, see the Workplaces section of the report.

Additional details regarding governance structures and policies at The Walt Disney Company are available at the Corporate Governance tab of the company's corporate website and in the company's annual proxy statement.