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SUSTAINABILITY REPORT

Tyson Foods is committed to best practices in corporate governance. We believe maintaining qualified, independent directors on our Board is an integral part of effective governance. The functions of Chairman of the Board of Directors and Chief Executive Officer (CEO) have been separated since 2006. The Board has appointed a lead independent director to preside over executive sessions of the independent, non-management directors. In addition:

  • Of nine directors, seven are independent.
  • In 2011 and 2012, two minorities served on our governance committee, one female served on our audit committee, and two females and two minorities served on the Board of Directors.
  • Of those persons serving on the Board of Directors and governance committees, all nine are over the age of 50.
  • Of the 19 executives and officers currently serving our company, five are between the ages of 30 and 50 and 14 are 50 or older. One is female, and none are minority.

Here is a listing of certain Executives and Officers. Learn more about our Corporate Governance Principles.

Forbes Logo In April 2011, Forbes magazine named Tyson Foods one of the most reputable companies in America. The magazine based its April 5 article on research from the Reputation Institute that analyzed seven dimensions of corporate reputation including workplace, governance, citizenship, financial performance, products and services, leadership, and innovation. Tyson Foods ranked as No. 50 of 150 companies and part of its reputation is tied to its ongoing corporate citizenship efforts to fight hunger in the U.S.

Director Qualifications and Nominations
Tyson Foods values the diverse thought, leadership, professional backgrounds, skills, and characteristics of our directors. As a part of the governance and oversight process, the Nominating Committee is responsible for identifying, evaluating, and recommending individuals qualified to be directors. While there are no specific minimum qualifications that a potential nominee must possess, the Nominating Committee selects director nominees for, but not limited to, their integrity, independence, diversity of experience, business or other relevant experience, leadership, and their ability to exercise sound judgment. Our company’s current directors bring broad-based experience related not only to food production but also investments, health care, education, commodities and marketing. To learn more about Tyson Foods’ director qualification and nomination process, we invite you to review the company’s Nominating Committee Charter and our 2012 Proxy Statement.

Board Committees
We maintain an Audit Committee, Compensation Committee, Governance Committee, and Nominating Committee. These committees are each chaired by an independent member of the Board and consist of at least three directors, each of whom meets the independence requirements of the New York Stock Exchange and are appointed by the Board. Through a clearly articulated set of Corporate Governance Principles and committee-specific charters, the directors are responsible for setting the overall governance tone and exercising their business judgment to act in what they reasonably believe to be in the best interests of the company and its shareholders. You can review our committee charters.

Compensation and Performance
In accordance with our Core Values, we are committed to creating value for our shareholders, and we strive to earn consistent and satisfactory profits for our shareholders. The Compensation Committee supports the Board and works with management to ensure key executives are compensated in accordance with management philosophy, company performance, competitive practice, and regulatory requirements. This approach strives to ensure our company’s compensation activities support business objectives, create shareholder value, are consistent with shareholder interests, and attract and retain the key executive talent our company requires. Additionally, this approach emphasizes company, business unit, and personal performance, thus creating a significant tie between the company’s financial performance and a key executive’s potential compensation. To learn more about the specific roles and responsibilities of this committee, we invite you to review the Compensation Committee Charter and our 2012 Proxy Statement.

Tyson Foods’ Board of Directors, under the direction of the lead independent director, conducts an annual self-evaluation to determine whether the Board, its committees, and the directors are functioning effectively. The assessment focuses on the contribution of the Board and each of its committees, and specifically will focus on areas in which the Board or management believes the Board and its committees could improve. The Board does not maintain a separate process for evaluating its performance with respect to economic, environmental, and social performance.

Avoiding Conflicts of Interest
Tyson Foods respects the Board of Directors’ and Team Members’ rights to manage personal interests and relationships. At the same time, Tyson Foods expects each person to avoid possible conflicts of interest with Tyson Foods’ business and avoid using his or her role or position to achieve personal gain. As a part of the governance and oversight process, the Governance Committee periodically reviews and approves certain transactions between Tyson Foods and executive officers, directors, or affiliates of Tyson Foods. Additionally, all Team Members are expected to properly disclose and document certain information regarding all personal and family interests, businesses, property, investments, and obligations that affect, or could be perceived to affect, their job duties or the reputation of Tyson Foods.

Shareholder Communications
Shareholders and other interested parties may direct communications to individual directors, including the lead independent director; to a Board committee; to the non-management directors as a group; or to the Board as a whole, by addressing the communication to the named individual, the committee, the non-management directors as a group, or the Board as a whole, c/o Tyson Foods, Inc., Attention: Secretary, 2200 W. Don Tyson Parkway, Springdale, AR 72762-6999. The company’s by‑laws prescribe how proposals of shareholders, intended to be presented at an annual meeting, must be received by the company. To be so included, a proposal must also comply with all applicable provisions of Rule 14a-8 under the Securities Exchange Act of 1934.

In addition, the company’s Corporate Governance Principles, Audit Committee Charter, Compensation Committee Charter, Nominating Committee Charter, Governance Committee Charter, Code of Conduct, Annual Report on Form 10-K, and other financial statements and schedules thereto are available on our Investor Relations website at http://ir.tyson.com. These documents are also available in print to any shareholder who sends a request to Tyson Foods, Inc., Attention: Secretary, 2200 W. Don Tyson Parkway, Springdale, AR 72762-6999.

Compliance Management
Tyson Foods performs regular Compliance Risk Assessments. These assessments are conducted in an effort to create and maintain an inventory of Tyson Foods’ compliance risks, measure the likelihood and significance of a compliance violation specific to a particular risk, gauge the effectiveness of management’s efforts to manage the risk, and offer suggestions for improvement. The company’s potential compliance risks areas are identified based on the following considerations:

  • Known laws or regulations that apply to Tyson Foods’ business
  • Standards provided by the company’s Code of Conduct and other voluntary codes
  • Legal and compliance risks disclosed in Tyson Foods’ Form 10-K
  • Previous compliance allegations, violations, enforcement actions, or settlements
  • Areas of compliance risk previously identified by internal or external auditors
  • Industry enforcement and litigation trends
  • Alleged compliance violations by competitors
  • Line management or Team Member views of known issues
  • Business practices that have been criticized by the media or non-government organizations

As a result of our Compliance Risk Assessments, we have identified 15 potential areas of compliance risk. This includes animal welfare; anti-trust; commodity-trading risk management; conflicts of interest; Team Member safety; employment practices; environmental compliance; food safety and quality assurance; government relations; international business practices; live production; records retention; financial reporting and corporate governance; safeguarding assets; and transportation.

Tyson Foods’ Compliance Organization
Tyson Foods has a Compliance Organization to establish and maintain a cohesive and effective compliance program that meets or exceeds the elements of the Federal Sentencing Guidelines. This program consists of activities implemented by Tyson Foods to manage and mitigate its compliance risks. The Chief Audit Executive and the Ethics and Compliance Officer, in consultation with the General Counsel, have overall responsibility, management, and authority for the Compliance Program, including structure, scope, resources, and initiatives. The Ethics and Compliance Officer is responsible for the daily administration of the Compliance Program.

Compliance Coordination Committee
Tyson Foods maintains a Compliance Coordination Committee. The principal activities of the members of this committee include but are not limited to:

  • Identifying opportunities to strengthen Tyson Foods’ approach to compliance risk management;
  • Communicating information about compliance-related policies, processes, procedures, and initiatives to their areas of responsibility; and
  • Implementing reliable processes to strengthen compliance risk management within their business units.

We also maintain an Executive Compliance Committee that is charged with providing oversight and approval of the initiatives of the Compliance Organization; approving certain company policies, procedures, and strategies related to compliance risk management; reviewing compliance risk assessments; and allocating necessary resources to improve compliance education, processes, and technologies.

Preventing Corrupt Business Practices
Tyson Foods values the foundation upon which we have established our ethics and compliance program, including:

  • Our Core Values and Codes;
  • An ethical culture of ‘doing what’s right’;
  • Comprehensive governance oversight and accountability;
  • The development and implementation of applicable policies and procedures;
  • Extensive education and communication strategies;
  • Internal controls and auditing practices; and
  • Confidential reporting mechanisms.

This foundation is applicable to all of our operations and business units. Periodic and meaningful risk assessments help us sustain and continually improve the overall performance and strength of our ethics and compliance program. As a result of these assessments, we have developed resources, training, and internal controls that help manage risks in the areas of fraud, corruption, and misconduct.

For example, we have established a training protocol for our management Team Members in our domestic and international business operations to receive annual training on anti-bribery and anti-corruption laws. Additionally, in fiscal year 2011, we developed three new policies related to anti-corruption, gifts and hospitality, and charitable donations and political contributions. Each of these policies provides Team Members with rules and guidance to help ensure compliance with relevant anti-bribery and anti-corruption laws. Performing our jobs in a manner free of bribery and corruption is not only the right thing to do; it’s how honorable companies conduct business.

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