Message from Our Chairman

At Microsoft, success comes from our passion for creating value—value for customers, shareholders, and partners; value for our employees and the communities around the world where we do business. Underlying our success is an approach to corporate governance that extends beyond simple compliance with legal requirements. I believe that corporate governance must provide a framework for establishing a culture of business integrity, accountability, and responsible business practices.

Strong corporate governance at Microsoft starts with a Board of Directors that is independent, engaged, committed, and effective. Our Board establishes, maintains, and monitors standards and policies for ethics, business practices, and compliance that span the company. Working with management, we set strategic business objectives, ensure that Microsoft has leadership that is dynamic and responsive, track performance, and institute strong financial controls. We believe in strengthening investor confidence and creating long-term shareholder value so we can continue to deliver technology innovations that provide opportunities for customers and for Microsoft.

— Bill Gates, Microsoft Chairman

Corporate Governance at Microsoft Corporation

Corporate governance at Microsoft serves several purposes:

Role of the Board of Directors

Shareholders elect the Board of Directors to oversee management and to assure that shareholder long-term interests are served. Through oversight, review, and counsel, the Board of Directors establishes and promotes Microsoft's business and organizational objectives. The Board oversees the company's business affairs and integrity, works with management to determine the company's mission and long-term strategy, performs the annual CEO evaluation, oversees CEO succession planning, oversees internal controls over financial reporting, and assesses company risks and strategies for risk mitigation.

Board Committees

The Board has five committees: an Antitrust Compliance Committee, an Audit Committee, a Compensation Committee, a Governance and Nominating Committee, and a Finance Committee. Each committee is led by, and is composed solely of, independent directors. Each committee is responsible for the review and oversight of company activities in the areas designated in its charter.

Corporate Governance Guidelines

Over the course of Microsoft's history, the Board of Directors has developed corporate governance policies and practices to help it fulfill its responsibilities. These policies are memorialized in the Corporate Governance Guidelines, to assure that the Board has the necessary authority and practices in place to review and evaluate the Company's business operations and to make decisions that are independent of the company's management. The Board routinely reviews evolving practices to determine those that will best serve the interests of our shareholders, and most recently modified on September 12, 2007. The guidelines are subject to future refinement or changes, as the Board finds necessary to achieve these objectives.

Corporate Governance Resources

Additional information about corporate governance practices at Microsoft is available on the following Web pages: