from the non-employee directors or be an employee. However, our Corporate Governance Guidelines require
that, if the Chairman of the Board is not an independent director, the chairman of the Governance Committee will
serve as a lead director. The lead director will act as a liaison between the independent directors and management
and is responsible for assisting the Chairman in establishing the agenda for Board meetings, for coordinating the
agenda for, and chairing, the executive session of the non-management directors, and for performing such other
duties as may be specified by the Board from time to time.
focus on setting the strategic direction of the company and the day-to-day leadership and performance of the
company, while permitting the Chairman to focus on providing guidance to the Chief Executive Officer and
setting the agenda for Board meetings. The Board also believes that the separation of the Chief Executive Officer
and Chairman roles assists the Board in providing robust discussion and evaluation of strategic goals and
objectives. However, our Board of Directors acknowledges that no single leadership model is right for all
companies at all times. As such, our Board of Directors periodically reviews its leadership structure and may,
depending on the circumstances, choose a different leadership structure in the future.
company's policies with respect to risk assessment and risk management, has primary responsibility for oversight
of our enterprise risk management, or ERM, program on behalf of the Board. Our chief audit executive, who
reports independently to the Audit Committee, facilitates the ERM process as part of our strategic planning
process. As part of the ERM process, each of our major business unit and functional area heads, with the
assistance of their staff, semi-annually completes a questionnaire used to identify risks that could affect
achievement of our business goals and strategy, and the actions taken or to be taken to mitigate and/or respond to
such risks. Representatives from our internal audit function also interview these individuals to elicit additional
information. After input from these individuals is received, our internal audit function summarizes the results of
the questionnaires and interviews and provides an analysis to a summary review committee for each of our WD
and HGST subsidiaries consisting of all individuals reporting to that respective subsidiary President. At each
summary review committee meeting, the risks for that subsidiary are reviewed and commented upon as to risk
likelihood and impact. The analysis is updated based on input from the summary review committees, and an
analysis is again performed to create a consolidated company risk profile. All three analyses are provided to the
WDC Chief Executive Officer, WDC President and WDC Chief Financial Officer for final review. Once the
analysis is finalized, it is reviewed and discussed by the Audit Committee. Senior management then reviews the
analysis with the Board of Directors on at least an annual basis. The final analyses, including the input from the
Audit Committee and full Board, is then reviewed with the respective summary review committee for each
subsidiary and used by our internal audit function in its internal audit planning. In addition, an abbreviated
analysis is also reviewed and updated by senior management on a quarterly basis in connection with the
preparation of the risk factors included in our periodic reports. In addition to the formal ERM program, each of
the other Board committees is charged with identifying potential risks to the company during the course of their
respective committee work. If a committee identifies a potential risk during the course of its work, the potential
risk is to be raised to the Audit Committee and full Board for inclusion in the ERM program discussed above. In
addition, the Board as a whole is updated throughout the year on specific risks and mitigating controls in the
course of its review of our strategy and business plan and through reports to the Board by its respective
committees and senior members of management.
as described under "Board Leadership Structure" above.