Corporate Governance Guidelines

The Board of Directors of The Sherwin-Williams Company has adopted the following corporate governance guidelines to provide the framework for the governance of the Company.  The Board will review these guidelines at least annually and make such revisions as it deems necessary and appropriate.

Director Qualification Standards

 

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Director Responsibilities

  1. Role of the Directors.  The Board serves as representatives for and is accountable to the Company's shareholders.  The Board has oversight responsibility of management.  The Company's business is conducted by officers, managers and employees under the direction of the Chief Executive Officer and the oversight of the Board.  The Board delegates to the Chief Executive Officer, and through him or her to other senior management, the authority and responsibility for managing the day-to-day affairs of the Company.  In addition to its general oversight of management, the Board's oversight function includes responsibility for:

In performing its oversight function, the Board is entitled to rely upon advice, reports and opinions of management, counsel, independent auditors and expert advisors.

  1. Attendance at Board and Shareholder Meetings.  Absent unusual circumstances, each director is expected to attend all meetings of the Board and all meetings of any committee on which such director serves.  Each director is also expected to attend, absent unusual circumstances, all annual and special meetings of shareholders.
  2. Board Agenda.  The Chairman of the Board, with input and approval from the Lead Director, will establish the agenda for each Board meeting.  Each director is free to suggest that particular items be placed on the agenda.  The agenda will be distributed to each director in advance of each Board meeting.
  3. Board Materials Distributed in Advance.  Information and data that is important to the directors' understanding of the business and which will assist directors to prepare for productive Board meetings will generally be distributed in writing to the directors before each Board meeting.  Management will make every effort to provide materials that are brief and to the point, while communicating all of the appropriate information.
  4. Executive Sessions of Non-management Directors.  Non-management directors will meet at least twice each year in regularly scheduled executive sessions.  Other executive sessions of the non-management directors may be scheduled and/or called by the Lead Director or non-management directors as determined appropriate.  The Lead Director will chair such executive sessions.  Formal deliberations or decisions concerning the business and affairs of the Company will occur only during regular or special meetings of the full Board and not during executive sessions.
  5. Management Speaks for the Company.  Management speaks for the Company.  Individual directors will only communicate with various constituencies that are involved with the Company with the knowledge and concurrence of the Chief Executive Officer.  Following any such communication, the director will advise the Chief Executive Officer of the nature and content of such communications.
  6. Committees of the Board.  Committees have been established to assist the Board to effectively and efficiently fulfill its oversight responsibilities.  The Board has three standing Committees:  the Audit Committee, the Compensation and Management Development Committee, and the Nominating and Corporate Governance Committee.  Membership of each Committee will be composed solely of independent directors and each Committee shall have not less than three members.  The Board has adopted a charter for each Committee and will review and evaluate the adequacy of these charters on an annual basis.  Membership and the appointment of a chairperson is reviewed and approved by the full Board, with the input of the Chief Executive Officer, on an annual basis.  The Board may establish from time to time such other committees as it determines appropriate.

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Access to Management and Independent Advisors

  1. Board Access to Management.  Directors have complete access to the Company's management.  Directors will use their judgment to be sure that any such contact is not distracting to the business operations of the Company and that such contact be communicated to the Chief Executive Officer.
  2. Attendance of Management at Board Meetings.  The Board welcomes the attendance of members of management from time to time in Board meetings to:  (a) provide management insight into items being discussed by the Board which involve the manager; (b) make presentations to the Board on matters which involve the manager; and (c) bring managers with high potential for advancement into contact with the Board.
  3. Director Access to Independent Advisors.  The Board or any Committee may retain, at such times and on such terms as the Board or Committee determines in its sole discretion and at the Company's expense, independent legal, financial or other independent consultants and advisors, to advise and assist the Board or Committee in discharging its responsibilities.

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Director Orientation and Continuing Education

  1. Director Orientation.  A thorough understanding of the Company's industry, business and corporate governance practices is required to enable a director to make a substantial contribution to the Board.  Accordingly, all new directors shall participate in an orientation program developed by the Company after their election or appointment to the Board.  This orientation will include presentations by senior management to familiarize new directors with the Company’s industry, business, strategic plans, financial statements, corporate governance practices and its key policies and practices.
  2. Director Continuing Education.  The Board believes that each director should participate in continuing education, through in-house presentations or attendance at outside educational programs at Company expense, from time to time to enable the directors to better perform their duties and to recognize and deal appropriately with issues that arise.

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Performance Evaluations; Succession Planning

  1. Performance Evaluation of Board and Committees.  The Board and each Committee shall conduct an annual self-evaluation of the performance of the Board and each Committee.  Such evaluations should generally include an assessment of the Board's and each Committee's structure and procedures, as well as an assessment of the overall effectiveness of the Board and each Committee.
  2. Performance Evaluation of the Chief Executive Officer.  The Board shall conduct an annual evaluation of the performance of the Chief Executive Officer.  The Compensation and Management Development Committee will conduct an annual review of the Chief Executive Officer’s compensation as set forth in its charter.
  3. Succession Planning.  The Chief Executive Officer shall conduct an annual evaluation of the performance of the senior management team.  The Chief Executive Officer will report the results of such evaluation to the Board, along with the Chief Executive Officer's thoughts and recommendations on management development and succession planning.  The Board will work with the Chief Executive Officer to plan for Chief Executive Officer succession, as well as to develop plans in the event of an unexpected occurrence resulting in a temporary incapacity or a sudden departure of the Chief Executive Officer.  Succession planning may be reviewed more frequently by the Board as either determines appropriate.

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Director Compensation

  1. Board Compensation.  Non-employee directors receive compensation for their Board service.  Employee directors do not receive compensation for their Board service.
  2. Director's Minimum Share Ownership Requirement. Director's Minimum Share Ownership Requirement.  The Board has established a minimum share ownership requirement to ensure that the interests of each director is aligned with the interests of the Company's shareholders.  Each director who has served on the Board for at least five years shall own shares of common stock equal in value to a minimum of seven times the annual Board cash retainer. For purposes of obtaining this minimum share ownership requirement, each equivalent share of common stock held by a director under the Company's Director Deferred Fee Plan shall be considered as a share of common stock owned by such director.

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Communications with Directors

  1. Interested parties may communicate with the Chairpersons of the Audit Committee, the Compensation and Management Development Committee or the Nominating and Corporate Governance Committee, or the non-management directors as a group by regular mail.  Communications should be sent to the attention of the Chairperson, Audit Committee, Chairperson, Compensation and Management Development Committee, or Chairperson, Nominating and Corporate Governance Committee, or to the outside directors as a group to the Non-Management Directors, each c/o Corporate Secretary, The Sherwin-Williams Company, 101 West Prospect Avenue, 12th Floor, Midland Building, Cleveland, Ohio 44115.