Sustainability Report - Dell

Corporate AccountabilityDell's success is based on maintaining direct relationships built on trust. To sustain this trustwith our employees, customers, suppliers and investors, we must hold ourselves to the higheststandards as we do business throughout the world.Dell defines our commitment to the areas of responsible business practices and companyengagement as Corporate Accountability. Dell's statement of Corporate Accountability wasdeveloped and adopted in 2003, and reads as follows:"Through its direct relationships with customers, employees, and stakeholders, Dell makestechnology more affordable and accessible for more people. Dell builds these relationshipsand sustains our business and social benefits by seeking input from and keeping our commitmentsto employees, customers, and shareholders; holding ourselves to a higher ethicalstandard; respecting the individual rights and dignity of others; and increasing our valueto customers by improving our performance and productivity and reducing the cost andenvironmental impact of our products and operations."Corporate GovernanceDell's corporate governance structure specifies the distributionof rights and responsibilities among different participants in thecompany (including shareholders) and establishes the proceduresfor making decisions about the company's business.Board of DirectorsThe Board of Directors believes that adherence to sound corporategovernance policies and practices is important in ensuringthat Dell is governed and managed with the highest standardsof responsibility, ethics and integrity and in the best interestsof our stockholders. The Board has adopted Principles ofCorporate Governance, which provide an effective corporategovernance framework for Dell, intending to reflect a set ofcore values that provide the foundation for Dell's governanceand management systems and our interactions with others.Dell's Board of Directors has an active role in guiding the conductof Dell's business—including sustainability. In 2003, Dellenhanced our governance process, adding a biannual briefingfor the Governance and Nominating Committee on areas ofemerging social and environmental risk. The Board periodicallyreviews and provides input into Dell's sustainability strategies.For more information about Dell's Board of Directors, includingbiographical details outlining the diversity of its members, aswell as the full text of the Principles of Corporate Governance,see www.dell.com/corporate.Election of DirectorsDell strengthened our corporate governance framework infiscal year 2006 by amending our bylaws to implement a higherstandard for the election of directors. Under the new majorityvote standard—which replaces plurality voting for uncontesteddirector election—a nominee for a seat on the board mustreceive favorable votes from holders of a majority of the sharesrepresented at the meeting and entitled to vote in order tobe elected to the Board of Directors. In contested elections,directors will continue to be elected by plurality vote.The Board of Directors also revised the company's corporategovernance principles by implementing the new majority votestandard. Under these revised principles, an incumbent directorwho does not receive the required vote for re-election will berequired to tender a resignation. The Board will accept or rejectthe resignation, or take other appropriate action, based on thebest interests of Dell and our stockholders, and will publiclydisclose the decision and rationale within 90 days.This change demonstrates a commitment to govern andmanage Dell to the highest standards of responsibility, ethicsand integrity—and in the best interests of stockholders.16 D E L L S U S T A I N A B I L I T Y R E P O R T • F I S C A L Y E A R 2 0 0 6