IDEAL CORPORATE GOVERNANCE

WALT DISNEY CASE STUDY

Ms. Shamsi Sukumaran

Ms. Indu George

Ms. Bableen Kaur

CORPORATE GOVERNANCE

Corporate governance is “the system by which companies are directed and

controlled.” It is concerned with structures and the allocation of responsibilities
within companies. Corporate governance is concerned with the way in which
corporations are governed.

Corporate Governance is a set of relationships between a company's management, its

board, its shareholders and other stakeholders. Corporate governance also provides
the structure through which the objectives of the company are set, and the means of
attaining those objectives and monitoring performance are determined. Good
corporate governance should provide proper incentives for the board and
management to pursue objectives that are in the interests of the company and
shareholders and should facilitate effective monitoring, thereby encouraging firms
to use resources more efficiently.

Two observations of the role of the organisation can be made- First, it is assumed
that the corporation serves purely as an agency for wealth-maximization for all
concerned. The shareholders' interests are assumed to be synonymous with those of
the company and the role and interests of stakeholders are narrowly defined in terms
of economic activity. Second, stakeholders are carefully defined in close legal terms:
only rights protected by law – whether through contract or by statute – need be
respected. Wider, non-statutory or non-contractual relationships are not considered in
this framework.

ROLE OF CORPORATE GOVERNANCE

• Separating the functions of the CEO and the chairman of the board.
• Developing financial incentives for employees based on long-term goals, not
short-term earnings.
• Requiring a periodic change of the external auditors at the enterprises, not just
a change in engagement partner.
• Establishing a “materiality” standard for the provision of sufficient
information to the board of directors.
• Imposing strict term limits on the members of the board of directors.
• Ensuring that the board becomes more actively involved in oversight of the
enterprise.
• Establishing a formal compliance program.
• Establishing the position of chief risk officer.
• Establishing and maintain superior accounting controls.
• Preventing undue reliance on the external auditor/
• Strengthening and clarifying the role of the internal audit department.

ISSUES

• Trust and social relationships

• Societal and moral foundations of economic behaviour
• Institutional transferability
• Corporate control and power relations in society
WALT DISNEY CASE STUDY

IDEAL CORPORATE GOVERNANCE

One of the reasons why Disney has a reputation of delivering a seamless "magical"
experience to its guests in all of its operations - theme parks, hotels, restaurants, retail
stores, etc. - is because it has one overriding vision and mission for all of its business
operations.

"The mission of The Walt Disney Company is to be one of the world's leading
producers and providers of entertainment and information. Using our portfolio of
brands to differentiate our content, services and consumer products, we seek to
develop the most creative, innovative and profitable entertainment experiences and
related products in the world."

The Walt Disney Company is the largest media and entertainment conglomerate in the
world. Founded on October 16th, 1923 by brothers Walt Disney and Roy Disney as
the Disney Brothers Cartoon Studio, the company was reincorporated as Walt Disney
Productions in 1929. Walt Disney Productions established itself as a leader in the
American animation industry before diversifying into live-action film production,
television, and travel.

CODE OF CONDUCT FOR DIRECTORS

The Walt Disney Company is committed to conducting business in accordance with

the highest standards of business ethics and complying with applicable laws, rules and
regulations.

Every Director must:

(i) represent the interests of the shareholders of The Walt Disney

Company;
(ii) exhibit high standards of integrity, commitment and independence of
thought and judgment;
 (iii) dedicate sufficient time, energy and attention to ensure the diligent
performance of his or her duties; and
(iv) Comply with every provision of this Code.
CONFLICTS OF INTEREST
Directors must avoid conflicts of interest. A conflict of interest occurs when an
individual's private interest interferes in any way with the interests of the company or
any of its subsidiary and affiliated companies.

BUSINESS RELATIONSHIPS WITH DIRECTORS

For the purpose of minimizing the risk of conflicts of interest, the Board shall adopt a
policy providing for the review of transactions with the Company or any of its
affiliates in which any Director has a direct or indirect material interest.

USE OF CORPORATE INFORMATION, OPPORTUNITIES AND ASSETS

Directors may not compete with the Company, or use opportunities that are
discovered through the use of Company property, Company information or position,
for their personal benefit or the benefit of persons or entities outside the Company.

CONFIDENTIALITY
Pursuant to their fiduciary duties of loyalty and care, Directors are required to protect
and hold confidential all non-public information obtained due to their directorship
position absent the express or implied permission of the Board of Directors to disclose
such information. Accordingly,

(i) no Director shall use Confidential Information for his or her own personal
benefit or to benefit persons or entities outside the Company; and
(ii) no Director shall disclose Confidential Information outside the Company,
either during or after his or her service as a Director of the Company, except
with authorization of the Board of Directors or as may be otherwise required
by law.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

The Company requires strict compliance by all its Directors with applicable laws,
rules and regulations. These include federal and other securities laws, including
insider trading laws, and the Company's insider trading compliance policies.

FAIR DEALING
Directors must deal fairly with the Company's employees, customers, suppliers and
competitors.
ACCOUNTABILITY
The Code referred to herein is mandatory and applies to all Directors, who are
accountable for compliance with the Code.

WAIVER
Any waiver of any provision of the Code may be made only by the Board or by the
Governance and Nominating Committee, and must be promptly disclosed to the
Company's shareholders as required by applicable law or securities exchange
regulations.

BUSINESS STANDARDS AND ETHICS

The Walt Disney Company incorporates best-in-class business standards as a key

pillar of its business practices.

BUSINESS STANDARDS AND ETHICS TRAINING

Business Standards and Ethics training is provided by the company through its
Business Conduct Training Centre, which provides education and training to domestic
and international employees through web-based tutorials, regarding the
company's Standards of Business Conduct and related areas.

STANDARDS OF BUSINESS CONDUCT

The Standards of Business Conduct are to guide the behaviour and to help live up to
the highest expectations of excellence that are "Disney."

ETHICAL STANDARDS

A. RESPONSIBILITY TO GUESTS AND CUSTOMERS

1. Quality
2. Guest Safety

B. RESPONSIBILITY TO CAST MEMBERS AND EMPLOYEES

1. Professional Development
2. Safety
 3. Diversity
4. Teamwork and Communications
5. Respect for the individual

C. RESPONSIBILITY TO THE COMPANY AND

SHAREHOLDERS
1. Conflicts of interests
2. Doing Business, or Influencing Business Relationships, with Family
Members and Affiliates; and Other Conflicts
3. Use of Corporate Information, Opportunities, and Assets
4. Intellectual Property and Proprietary Information
5. Accurate Reporting

D. RESPONSIBILITY TO OTHER BUSINESSES

1. Customers and Licensees
2. Vendors
3. Acceptance of Gifts
4. Dealing with Financial Institutions
5. Bids, Sole Sources, and Negotiated Bids
6. Minority Vendor Purchases
7. Multiple Relationships

E. RESPONSIBILITIES TO COMMUNITIES
1. Government Officials
2. Political Activity
3. Communities
4. International

HIRING PRACTICES
It is the policy of The Walt Disney Company to provide equal opportunity for all
employees and applicants for employment without regard to race, religion, colour,
sex, sexual orientation, national origin, age, marital status, covered veteran status,
mental or physical disability, pregnancy, or any other basis prohibited by state or
federal law.

HUMAN RESOURCES
The Walt Disney Company's employees and cast members are essential to
fulfilling our business goals.

At The Walt Disney Company, our employees and cast members make the magic happen. We strive to
create an optimal employee experience while meeting our business needs.

Our culture and values reinforce our commitment and responsibility to the people in our organization.
Our services include:

• Talent Acquisition
• Learning & Development
• Employee Services & Events
• Communication
 o Company communications frequently highlight business initiatives and strategy,
employee recognition, work-life assistance, volunteerism opportunities, business
conduct and ethics practices and social responsibility practices.

HARASSMENT PREVENTION AND DISCRIMINATION POLICIES

The Walt Disney Company's policy prohibits employees from harassing any other
employee, guest or other person in the course of the company's business for any
reason prohibited by law, including, but not limited to, race, religion, colour, sex,
sexual orientation, national origin, age, marital status, covered veteran status,
mental or physical disability, pregnancy, or any other basis prohibited by state or
federal law.

SAFETY AND SECURITY

The safety and security of guests and cast members is of paramount importance to and
is evident in programs throughout Disney.

• Parks Safety Programs and Policies

Since Disney began building and operating theme parks in the 1950's, the
Company has established hundreds of internal standards for the development
and operation of theme park attractions.
• Internet Safety
Since the launch of its first Internet site in 1995, the Walt Disney Internet
Group (WDIG) has been committed to promoting both safe Internet practices
for children and parental involvement in kids' online experiences
• Workplace Safety Programs and Training
The Company aims to minimize risks and associated costs by providing
quality and professional technical services that foster the safest environment
possible for guests, cast members, and property.
• Park Security
The security teams are dedicated in promoting a safe and secure environment
for all of guests and cast members.
• Product Safety
Disney is extremely concerned about the quality and safety of its consumer
products, especially those products that are enjoyed by children.
• Depiction of Smoking in Movies
Disney is concerned about the impact of the depiction of smoking in movies
on youth and actively looks for ways to limit the depiction of smoking in
movies marketed to youth.

CORPORATE GOVERNANCE
John E. Pepper, Jr.
Chairman of the Board

The Walt Disney Company is committed to governance policies and practices that
assure shareholder interests are represented in a thoughtful and independent manner.

CORPORATE GOVERNANCE GUIDELINES

COMPOSITION OF THE BOARD OF DIRECTORS

The Walt Disney company board of Directors shall consist of not less than nine or
more than 21 Directors, with the exact number being determined from time to time by
resolution of the Board.

BOARD CHARACTERISTICS
• Each Director shall at all times represent the interests of the shareholders of
the Company.
• Each Director shall at all times exhibit high standards of integrity,
commitment and independence of thought and judgment.
• Each Director shall dedicate sufficient time, energy and attention to ensure the
diligent performance of his or her duties, including by attending shareholder
meetings and meetings of the Board and Committees of which he or she is a
member, and by reviewing in advance all meeting materials.
• The Board shall meet the standards of independence from the Company and its
management set forth under "Director Independence" below.
• The Board shall encompass a range of talent, skill and expertise sufficient to
provide sound and prudent guidance with respect to all of the Company's
operations and interests.
• The Board shall reflect the diversity of the Company's shareholders,
employees, customers, guests and communities.

FUNCTIONS OF THE BOARD OF DIRECTORS

The responsibility of the Board of Directors is to supervise and direct the management
of the Company in the interest and for the benefit of the Company's shareholders. To
that end, the Board of Directors shall, act directly or through Committees, have the
following duties:
• Overseeing the conduct of the Company's business to evaluate whether the
business is being properly managed;
• Reviewing and, where appropriate, approving the Company's major financial
objectives, plans and actions;
 • Reviewing and, where appropriate, approving major changes in, and
determinations of other major issues respecting, the appropriate auditing and
accounting principles and practices to be used in the preparation of the
Company's financial statements;
• Assessing major risk factors relating to the Company and its performance, and
reviewing measures to address and mitigate such risks;
• Regularly evaluating the performance and approving the compensation of the
Chief Executive Officer and, with the advice of the Chief Executive Officer,
regularly evaluating the performance of principal senior executives; and
• Planning for succession with respect to the position of Chief Executive Officer
and monitoring management's succession planning for other key executives.
• The Board of Directors has delegated to the Chief Executive Officer, working
with the other executive officers of the Company and its affiliates, the
authority and responsibility for managing the business of the Company in a
manner consistent with the standards of the Company, and in accordance with
any specific plans, instructions or directions of the Board.

DIRECTOR INDEPENDENCE
It is the policy of the Board of Directors that a substantial majority of Directors be
independent of the Company and of the Company's management. The Board shall
apply the following standards:
• A Director who is, or has been within the last three years, an employee of the
Company, or whose immediate family member is, or has been within the last
three years an executive officer, of the Company may not be deemed
independent.
• A Director who has received, or who has an immediate family member who
has received, during any twelve-month period within the last three years, more
than $120,000 in direct compensation from the Company, other than director
and committee fees and pension or other forms of deferred compensation for
prior service (provided such compensation is not contingent in any way on
continued service), may not be deemed independent. Compensation received
by a Director for former service as an interim Chairman or Chief Executive
Officer and compensation received by an immediate family member for
service as a non-executive employee of the Company will not be considered in
determining independence under this test.
• A Director who is a current partner or employee of a firm that is the
Company's external auditor; (B) a Director who has an immediate family
member who is a current partner of such firm; (C) a Director who has an
immediate family member who is a current employee of such a firm and
personally works on the Company's audit; or (D) a Director who was, or
whose immediate family member was, within the last three years a partner or
employee of such a firm and personally worked on the Company's audit within
that time may not be deemed independent.
• A Director who is, or whose immediate family member is, or has been within
the last three years, employed as an executive officer of another company
where any of the Company's present executive officers at the time serves or
served on that company's compensation committee may not be deemed
independent.
 • A Director who is a current employee or general partner, or whose immediate
family member is a current executive officer or general partner, of an entity
that has made payments to, or received payments from, the Company for
property or services in an amount which, in any of the last three fiscal years,
exceeds the greater of $1 million or 2% of such other entity's consolidated
gross revenues, may not be deemed independent.

BUSINESS RELATIONSHIPS WITH DIRECTORS

To minimise the risk of actual or perceived conflicts of interest, the Board shall adopt
a policy providing for the review of transactions with the Company or any of its
affiliates in which any Director has a direct or indirect material interest.

STOCK OWNERSHIP BY DIRECTORS

It is the policy of the Board that all Directors, consistent with their responsibilities to
the shareholders of the Company as a whole, hold a significant equity interest in the
Company

DIRECTOR COMPENSATION
The compensation of Directors who are not employees of the Company shall be
determined annually by the Board of Directors acting upon recommendation of the
Compensation Committee, which may obtain the advice of such experts as the
Committee deems appropriate. Compensation may be paid in the form of cash or
equity interests in the Company or such other forms as the Board deems appropriate
and shall be at levels that are consistent with those in effect for directors of similarly
situated businesses.

BOARD LEADERSHIP
The Board of Directors shall designate one of its members to serve as Chairman of the
Board. The powers and responsibilities of the Chairman of the Board shall be set forth
in the Corporation's By-laws, as supplemented from time to time by resolution of the
Board of Directors.

MANAGEMENT SUCCESSION AND REVIEW

At least once a year, the Chief Executive Officer of the Company shall meet with the
non-management Directors to discuss potential successors as Chief Executive Officer.
The Chief Executive Officer shall also review periodically with the non-management
Directors the performance of other key members of the senior management of the
Company, as well as potential succession arrangements for such management
members.

BOARD MEETINGS
The Chairman of the Board, in consultation with the other members of the Board,
shall determine the timing and length of the meetings of the Board. The Board expects
that six regular meetings at appropriate intervals. Unscheduled Board meetings may
be called upon appropriate notice at any time to address specific needs of the
Company.

BOARD COMMITTEES
Committees shall be established by the Board from time to time to facilitate and assist
in the execution of the Board's responsibilities. There are currently four standing
committees:
• Executive Committee
• Audit Committee
• Compensation Committee
• Governance and Nominating Committee

COMMITTEE MEMBERSHIP
Each year, the Chairman of the Board, after consideration of the desires, experience
and expertise of individual Directors and after consultation with the Chief Executive
Officer, shall recommend to the Governance and Nominating Committee the
assignment of Directors to Committees, including the designation of Committee
Chairs. If any Director ceases to be independent under the standards set forth herein
while serving on any Committee whose members must be independent, he or she shall
promptly resign from that Committee.

COMMITTEE MEETINGS
Each Committee Chair, after consultation with the Chairman of the Board, shall
establish agendas and set meetings at the frequency and length appropriate and
necessary to carry out the Committee's responsibilities.

BOARD MATERIALS
Directors shall receive information and data that are important to their understanding
of the businesses of the Company, in writing, and in sufficient time to prepare for
meetings.

BOARD CONDUCT AND REVIEW

Members of the Board of Directors shall act at all times in accordance with the
requirements of the Company's Code of Business Conduct and Ethics for Directors.
The Board shall conduct an annual review and evaluation of its conduct and
performance based upon participation by all Directors in an evaluation that includes,
among other things, an assessment of:
• the Board's composition and independence;
• the Board's access to and review of information from management, and the
quality of such information;
• the Board's responsiveness to shareholder concerns;
• maintenance and implementation of the Company's standards of conduct; and
• maintenance and implementation of these Guidelines.

SELECTION OF NEW DIRECTORS

The Board shall be responsible for selecting its own members. The Board delegates
the screening process for new Directors to the Governance and Nominating
Committee.

BOARD TENURE POLICY

The Board will not nominate for re-election any Director if the Director shall have
completed fifteen years of service as a member of the Board on or prior to the date of
the election as to which the nomination relates.
SOCIAL RESPONSIBILITY
The Company has a responsibility to the communities in which it operates, as well as
to its shareholders. To allow appropriate Board review and input, management shall
prepare and present to the Board an annual review of the policies, practices and
contributions made in fulfilment of the Company's social responsibilities. In addition,
management shall report annually on its diversity efforts and the results thereof.

IMPLEMENTATION OF THE GUIDELINES

If the Board ascertains at any time that any of the Guidelines set forth herein are not
in full force and effect, the Board shall take such action as it deems reasonably
necessary to assure full compliance as promptly as practicable.

CORPORATE SOCIAL RESPONSIBILITY OF DISNEY

DISNEY'S FRIENDS FOR CHANGE SUPPORTS GULF OIL SPILL RELIEF

EFFORT
Disney’s friend for change a multi-platform initiative that empowers kids to help the
planet has launched a new video spot about the oil spill in the Gulf. The program also
donated $100,000 to support clean-up efforts. "It's important for us to speak to kids
about this unprecedented environmental disaster, to acknowledge their emotions about
the news we're all seeing on a daily basis and encourage them to channel their feelings
into positive action," said Beth Stevens, senior vice president, Environmental Affairs
for The Walt Disney Company. "Kids want to help and even though the clean-up in
the Gulf is a job for trained professionals, all local waterways lead to the ocean so
we're recruiting kids to help keep them clean."

Included in the effort:

• Messages from kids, for kids: A new video spot features popular Disney
Channel stars including Joe Jonas , Brenda Song and Debby Ryan and Moises
Arias . The young stars discuss their own feelings about the disaster and steps
kids can take to make positive changes to keep local waterways clean.

• Charitable Contribution: Kids are also helping make a difference thanks to

the support of the Friends for Change song, Make a Wave. A $100,000
donation from the iTunes proceeds of the song has been directed to the Disney
Worldwide Conservation Fund to support habitat, wildlife and community
recovery in the region. The fund is donating this contribution to expert
environmental organizations responding to the disaster in the Gulf region
including $50,000 to the National Audubon Society.

• Online content and resources: A new collection of Disney's Friends for

Change online content (www.Disney.com/ProjectGreen) will provides
additional tips, step-by-step tool-kits to organize community waterway clean-
ups and resources for kids to learn more about why these actions matter.

DISNEYNATURE COLLABORATES WITH THE NATURE CONSERVANCY

TO SAVE CORAL REEF
The Bahamas represent an important ecosystem, straddling the Atlantic Ocean and the
Caribbean Sea. The 700 islands that comprise The Bahamas contain miles of vital
coral reefs, which are the foundation of a healthy ocean environment, providing
shelter, nurseries and feeding grounds for hundreds of marine species, including
dolphins, sea turtles and a wide range of fish. Scientists estimate that the coral reefs of
the Caribbean could be gone in 50 years without a network of well-managed marine
protected areas.

The Nature Conservancy is a leading conservation organization working around the

world to protect ecologically important lands and waters for nature and people.
Disneynature, the studio brought "Oceans" to the big screen on Earth Day, 2010.
"Oceans" offers an unprecedented look beneath the sea in a powerful motion picture.
"Disneynature has captured the beauty, wonder and fragility of our world's marine
habitats and species in 'Oceans,' said Mark Tercek, president and CEO of The Nature
Conservancy. “We appreciate Disney's commitment to help protect marine areas in
The Bahamas, which is home to 30 percent of all coral reefs in the Atlantic Ocean.
With Disneynature's support, The Nature Conservancy and its partners are making
significant progress toward our ambitious goal of doubling the total amount of marine
protected area in The Bahamas."

Throughout Earth Month, Disney also supported The Nature Conservancy's initiative
in stores and online adding an additional 4,000 acres protected. In Disney Stores,
proceeds from sales of eco-friendly "Save Planet Earth" reusable bags benefit the
Adopt a Coral Reef program. In addition, a donation on behalf of the company's
environmental youth initiative, Disney's Friends for Change, is also supporting the
cause allowing kids to vote on which region of coral reefs the contribution will
protect.

In The Bahamas, 300,000 acres are currently protected along the west side of Andros
Island. The Nature Conservancy and its local partners have worked to define new
marine protected area boundaries, which would result in growing the total protected
area from 300,000 acres to more than a million acres.

PRESS RELEASES
New Spot Featuring Disney Channel Stars Premieres Monday, July 19 on Disney
Channel, Disney XD, Radio Disney and Disney.com

Disney's Friends for Change, a movement that encourages kids to help the planet, is
launching a new video spot about the oil spill in the Gulf. The program is also
donating $100,000 to support clean-up efforts. This will encourage kids to
communicate their feelings about the disaster, understand how they are already
helping and learn more about how to protect our planet's natural resources and
wildlife.

DISNEYNATURE COLLABORATES WITH THE NATURE CONSERVANCY TO

SAVE 35,000 ACRES OF CORAL REEF IN THE BAHAMAS on April 21st.
Disneynature's Motion Picture "Oceans" Helps Establish a New Marine Protected
Area

Disneynature announced its "See 'OCEANS,' Save Oceans" campaign that will protect
more than 35,000 acres of coral reef in The Bahamas on behalf of the moviegoers
who came out to see Disneynature's motion picture "Oceans" during its opening week.
Through the Disney Worldwide Conservation Fund, Disneynature will help establish
new marine protected areas through The Nature Conservancy's Adopt a Coral Reef
program. At 55 square miles, this protected area of coral reefs will be almost two-and-
a-half times the size of Manhattan or the equivalent of more than 412 Disneylands,
supporting the expansion of the Westside National Park of Andros.

REFERENCES
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Dimsdale, N., Prevezer, M. (1994), Capital Markets and Corporate Governance,

Clarendon Press, Oxford

Hampel Report (1998), Committee on Corporate Governance: Final Report, Gee,

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OFHEO, December 2003 “Report of the Special Examination of Freddie Mac.”

Lee, Soo Hee, Jonathan Michie, and Christine Oughton. “Comparative corporate
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