Staples, the world’s largest office products company, is committed to making it easy for customers to buy a wide range of office products and services. Our broad selection of office supplies, electronics, technology and office furniture, as well as business services, including computer repair and copying and printing, helps our customers run their offices efficiently.

With 2011 sales of $25 billion and 88,000 associates worldwide, Staples operates in 26 countries throughout North America, Europe, Australia, South America and Asia. Our associates serve consumers and businesses of all sizes through our three operating divisions: North American Delivery, North American Retail and International.

Staples invented the office superstore concept in 1986 and ranks second worldwide in eCommerce sales. The company is headquartered outside Boston.

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Staples Corporate Overview

Staples 2011 Annual Report

Nothing is more important to Staples than the relationships we build as a company. Our key stakeholders include customers, associates, communities, non-governmental organizations (NGOs), investors and suppliers, as each of these groups has the potential to significantly influence our ability to run a successful business. We choose which specific stakeholders within each category to meet with based on a variety of factors, including the priority issues identified through the materiality analysis and previous stakeholder engagement, as well as individuals’ and organizations’ availability and desire to meet with Staples. Group specific-criteria are further discussed below.

We reach out to our stakeholders often, both with key information and messages about our values. We seek their comment and input on our activities and incorporate their feedback as we structure programs and initiatives and set corporate objectives. When and how we engage with stakeholders varies based on the group and topic, as detailed below.

Customers

Our mission is to bring easy to offices worldwide. Third-party mystery shoppers, as well as tens of thousands of customer satisfaction surveys each month, tell us whether we're getting it right. We also receive feedback from ratings services, such as BizRate, quality assurance monitoring programs and customer interviews.

Read more about our efforts to learn about our customers’ needs and concerns and to increase customers’ overall satisfaction levels in the “Customer Satisfaction” section of this report.

Associates

We engage with and support associates on an ongoing basis in many ways beyond their daily interactions with coworkers and managers:

• Print, online and broadcast communications reinforce core Staples goals and values and encourage associates to contribute to our company's ongoing success. In 2011, Staples introduced a new intranet for our associates called “The Hub,” which won a Nielsen Norman Group 2012 Intranet Design Award for the Year’s 10 Best Intranets. The objective of The Hub is to connect our associates globally, so we can streamline communications, provide an easier method for accessing critical tools and resources, and allow associates to connect with and share ideas with each other.
• We encourage associates at all levels of the business to reach their full potential through internal training and development, as well as external educational opportunities. We offer hundreds of classes to expand associates' business skills and introduce them to new ideas.
• In 2010, we implemented our first associate Global Engagement Survey. This initial survey provided our company and our leaders with insight into where we are doing a good job and where we have opportunities to improve. We also learned that identifying and implementing the opportunities to improve needs to happen at all levels of the organization. We also conducted a Global Engagement Pulse Survey in 2011, which provided many associates an opportunity to express their opinions and feelings on a narrower set of questions, and provided company leaders the opportunity to understand how things had changed from the prior year.

Communities

We seek to be a valued and trusted member of the communities in which our associates and customers live and work. Staples works closely with all the non-profit organizations we support, whether they are long-term national partners such as Boys & Girls Clubs of America, or small grassroots groups receiving a Staples Foundation℠ grant to fund a local program.

Our community relations team has surveyed our stakeholders to gauge awareness and perception of Staples’ community involvement, allowing us to continue defining the optimal community outreach programs. In fact, it was feedback from our associates that helped Staples Foundation decide on a new giving strategy in 2012, one that is associate driven. Internationally, we continued the Choose a Charity voting program that was initially launched in 2010. This program allows associates to nominate organizations to receive a portion of Staples funding. This past year, associates helped select 24 charities they personally cared about to receive nearly $1.9 million of donations.

Read more about our efforts in the “Community” section of this report.

Investors

As environmental, social and governance (ESG) issues make their way into mainstream investing, Staples is continuing its efforts to engage with both traditional investors and the socially responsible investment community. We respond to surveys that seek information about our corporate responsibility programs and performance, such as the Carbon Disclosure Project and the Dow Jones Sustainability Indexes questionnaire. We also meet with firms that include corporate responsibility information in their investment portfolio screening process.

As part of these efforts, in 2011, as in prior years, we conducted in-person and phone meetings with larger institutional investors, labor unions, pension funds, corporate social responsibility investors and proxy advisory groups. We engaged in a constructive dialogue to hear their perspectives on various corporate governance matters, as well as our executive compensation program. The results were shared with our Board of Directors.

Our discussions over the past years have helped us to understand which issues are important to Staples’ shareholders and how we can be responsive. This outreach also made it clear that our shareholders have divergent and varied opinions and perspectives regarding governance, executive compensation, Dodd-Frank legislation and proposed SEC rules.

Suppliers

We engage with suppliers to promote ethics in the supply chain, environmental excellence and innovation and a diverse supplier base. Our outreach efforts, among others, include the following:

• Our Supplier Code of Conduct requires suppliers of Staples® brand products to adhere to all applicable labor standards and health and safety regulations as well as environmental laws. Factories in “at-risk” geographies are audited for compliance with those standards. We engage with our Staples® brand suppliers both in the United States and internationally to make sure they understand the provisions of the Supplier Code of Conduct. Read more about supply chain sustainability in the “Ethical Sourcing” section of this report.
• We also work closely with our key suppliers to identify opportunities to increase the efficiency of our collective operations from both a financial and environmental standpoint. Since launching the “Race to the Top” strategy in 2010, to drive sustainability innovation in our products by working with our key suppliers, we have been focusing on reducing the environmental impacts of our product packaging. We have identified more than 200 packaging project opportunities and have prioritized and pursued the highest opportunity and quick-win projects with Staples’ key suppliers. Read more about packaging and product initiatives in the “Environment” section of this report.

We rely on the talents, strengths and commitment of our associates at every level – retail, sales force, fulfillment centers, management and the executive team – to deliver on our company mission to make buying office solutions easy for customers. We understand that having engaged associates who believe in our vision and values will provide the best customer experience and work environment for each other.

Assessing global perceptions

To help us gain a comprehensive understanding of how engaged our associates are — and, more importantly, what opportunities we have to drive further engagement — we conducted our first Global Engagement Survey in October 2010. This survey marked a big milestone in the company’s history by reaching out to Staples’ approximately 90,000 associates around the world. The survey was designed with the associate in mind, as it was available in 19 languages and was offered both electronically and via paper.

This initial survey provided our company and our leaders with insight into where we are doing a good job and where we have opportunities to improve. We also learned that identifying and implementing the opportunities to improve needs to happen at all levels of the organization. While the company may be able to invest in select programs, the cultural and environmental changes needed to make them successful will need to be emphasized to associates at all levels of management.

We also conducted a Global Engagement Pulse survey in 2011, which provided many associates an opportunity to express their opinions and feelings on a narrower set of questions. It also provided company leaders the opportunity to understand how things had changed from the prior year. Despite the economic challenges surrounding our company and industry, we showed an improvement in engagement overall. The survey also provided insight into how some of our strengths had lessened over the year.

Aligning our values and vision

This past year we also set out to realign our values with our company vision. Our TeamCARE values have served us well for more than 10 years, but as our vision continues to evolve, it became critical to reassess our values. Instead of having our management team dictate our company values from the top down, we asked our associates to tell us what they thought about working at Staples today, and how they thought we could improve. This analysis — conducted globally — allowed us to reshape our values and ensure we continue to work toward being a company that our associates will embrace. Culture change does not happen overnight; rather, it is a journey that we started last year.

Creating new communication channels

In 2011, Staples also rolled out a new intranet for our associates called “The Hub,” which won a Nielsen Norman Group 2012 Intranet Design Award for the Year’s 10 Best Intranets. The objective of The Hub is to connect our associates globally, so we can streamline communications, provide an easier method for accessing critical tools and resources, and allow associates to connect with and share ideas with each other. Through this global communication tool, our associates can now help and support one another, regardless of location. To date, The Hub has been rolled out to all U.S. associates and select associates in our international operations, and we will continue to improve our capabilities to reach more associates.

At Staples, we strive to provide superior value to our customers. We do this by offering a combination of low prices, a broad selection of products including eco-conscious choices, high-quality and innovative Staples® brand products, convenient store locations, easy-to-use Web sites, reliable and fast order delivery, and customer service that goes above and beyond.

Our overall objective is to become a close partner and trusted advisor to both our retail and business customers by better understanding — and meeting — their specific needs. In 2011, Staples invested in staples.com® to improve functionality, performance and usability, helping us to provide a better customer experience. This year, we also completed our warehouse systems integration in North America following the integration of Corporate Express, and began the process of transitioning all of our Contract customers over to our new and improved ordering platform, StaplesAdvantage.com. In North American Retail, we continued to invest to become a leader in copy & print, business technology and technology services. For example, we expanded and improved the quality of our copy & print offerings, and made a push into the mobile phone business to address the needs of small business customers.

Tracking progress and ensuring satisfaction

To make sure that we’re doing a good job, we survey customers in our retail and delivery businesses, monitor quality assurance efforts, drop in on stores unannounced through “mystery shops” and interview customers directly. Each month, we conduct tens of thousands of retail customer satisfaction surveys and receive feedback from thousands of customers in our North American Delivery business.

In our retail operations we ask customers to rank a variety of customer service factors, including friendliness and helpfulness of associates, cashier courtesy, speed of checkout, ease of finding merchandise, whether products are in stock, and associate product knowledge. We monitor these factors against diverse dimensions of the shopping experience, such as time of day and week that customers shop, whether they are shopping for personal or business purposes, and what type of products they are purchasing. Due to our ongoing investment in training and focus on improving the customer experience, our overall retail customer satisfaction scores continued to increase, with the percentage of customers indicating they are extremely satisfied increasing from 74.4 percent at the end of 2010 to 74.5 percent at the end of 2011.

We use customer feedback and suggestions to identify and correct issues, refine our product and service offerings and set aggressive year-over-year customer service improvement targets, for both retail and business customers.

Much as we do for our retail business, we also track and evaluate the performance of our North American Delivery (NAD) business. In addition to assessing our customers’ overall satisfaction, we also request feedback on specifics such as the ease of the shopping experience — online search capabilities, accuracy of product images and ease of checkout — as well as the packaging and delivery service, and satisfaction with any problem resolution. These indicators give us valuable insights into how our customers perceive their relationship with Staples.

Recognition and awards

Thanks to the collaborative effort of our leadership team and our associates globally to drive progress across all of our Soul pillars, several organizations recognized Staples in 2011 for excellence in corporate responsibility.

• For the eighth consecutive year, Staples was selected as a component of the Dow Jones Sustainability Indexes (DJSI) for 2011/12. Selected as a component for a ninth year for 2012/13.
• Ranked #2 among retailers and #17 overall in the Newsweek Green Rankings for 2011, which ranks the environmental efforts of the largest 500 companies in the U.S. In 2012, Staples moved up the rankings to #10 overall.
• Ranked #49 on CR’s 100 Best Corporate Citizens 2012.
• Named one of the Top 50 Companies for Diverse Managers to Work by Diversity MBA.
• Received a 100 (perfect score) on the Human Rights Campaign Corporate Equality Index. Also named one of the “Best Places to Work for LGBT Equality.”
• EPA Green Power Partner recognition: ranked #4 among all retailers, #7 among Fortune 500 companies and #7 in the U.S. (as of July 2012).
• 2012 EPA ENERGY STAR Partner of the Year for Energy Management for the second year in a row.
• Recognized as one of Diversity Inc.’s 25 Noteworthy Companies.
• Recognized by The Boston Club for having three women on our Board of Directors.
• Named a finalist in Australia for the 2011 Equal Opportunity for Women in the Workplace Agency (EOWA) Business Achievement Award in celebration of our inclusive workplace and the importance placed on diversity in our business. Staples Australia was also named a 2012 Employer of Choice for Women by EOWA.

We know that Staples' success depends on the best efforts of our associates. We also realize that to be at their best, associates need opportunities to develop their talents, sharpen their skills and receive feedback on their performance.

We are committed to talent development for our global workforce. Staples’ VP of Organizational and Executive Development oversees success planning and organizational design efforts in addition to recruiting, coaching and developing senior leaders. The Director of Learning and Development leads management development efforts for all associates at Director level and below, including live and virtual programs for managers around the world.

Each associate in North America receives an annual performance review that is based on objectives and development plans established at the start of the year. We have also established an annual performance review cycle as Staples policy in our international locations.

Individual training and development teams are embedded within business units and are responsible for organization-specific and function-specific training. Training teams exist within U.S. Retail, Canada Retail, International and North American Delivery (contract sales, logistics and supply chain, customer service and telesales).

Associates can learn about development opportunities either directly through their managers or by contacting their respective Human Resources team. In North America and some international locations, associates can also access the company's intranet to see required courses and register for open enrollment classes. In some cases, associates are nominated for management and leadership training.

Associate training

We encourage associates at all levels of the business to reach their full potential through internal training and development, as well as external educational opportunities.

We offer hundreds of classes to expand associates’ business skills and introduce them to new ideas. We are increasing our efforts to reach remote associates through virtual classroom training and are creating tools and processes to help associates focus on taking advantage of the most accessible opportunity for growth – on-the-job development.

Staples’ management development programs provide training across the entire career arc of our associates: from New Manager Programs like Leading at Staples for associates who recently entered management ranks, to Manager Certificate Programs for experienced managers, to the Advanced Manager Program for Senior Managers and Directors. Each course provides broad-based development support, including training on delegation, coaching, project management and communication skills, among others.

Leading at Staples: Foundations of Leadership

In North America, the Leadership Development team has continued the rollout of the Leading at Staples program, offering development on leadership competencies for all audiences based on the job level. The Foundations of Leadership program, focused on first-level supervisors and managers of individual contributors, is the initial offering under the Leading at Staples brand, with programs for Senior Managers/Directors and individual contributors to follow in 2013.

By August 2012, 20 sessions for supervisors and managers across every function within the United States were offered. The content of the program follows a very simple philosophy – that regardless of the function or location, there are vital leadership skills that can bolster managerial effectiveness and associate engagement. Topics include Emotional Intelligence, Selection & Hiring, Situational Leadership, Developing Associate Capabilities, and Project Planning. The training is delivered using a blended learning solution that includes virtual sessions, self-paced modules, classroom learning and on-the-job application through action plans.

Of particular importance is that in addition to professional trainers, the classroom sessions are facilitated by leaders from across Staples. This “Leaders Teaching Leaders” model offers developmental benefits for the participants as well as the leader-facilitators.

Leadership Development Curriculum revamped for retail business

Retail Talent and Development is revamping their approach to providing management training for Field Managers. As the business continues to grow and our retail stores become more complex and competitive, there is a stronger need for a more robust curriculum across all levels of field management. A team from across all four divisions is currently working to develop a scalable and sustainable best-in-class leadership development program targeting the growth of both current and future U.S. retail managers. The new and revised retail-specific training will focus on functional competencies and will be delivered in the field by Human Resources and high-profile District Managers/General Managers.

Launching our global talent management system

In 2011, Staples continued the process of launching our global talent management system, Talent Track. This system consists of three modules: a learning management system, used by associates to access and complete learning content; a performance management system, used to complete performance appraisals and other performance management components; and a succession planning system.

U.S. retail stores successfully launched the learning management and performance management systems in early 2012. With these systems now in place, stores are better able to tie together learning and performance efforts, and are better able to support associate development.

Staples supports remote people management

In 2012, the Learning and Development Team launched a new pilot training program for managers leading remote teams, with the goal of helping them face the challenge of managing people and performance at a distance. The program uses online training modules with a focus on an applied learning approach (experience sharing, individual case study work, coaching and mentoring). Participants gain an understanding of the principles of effective people management and the specific challenges of remote people management. They also develop key competencies of an effective remote manager and define effective solutions and apply best practices for their individual management situations.

Staples’ approach to healthcare considers its associates’ mental, physical and financial health. While some benefits are available only to full-time associates, many are offered to all associates in support of our culture of health.

Staples offers Personal Health Assessment (PHA) rewards to full-time associates and their covered spouses or domestic partners. Through its health plans, Staples encourages all associates to take advantage of the low- or no-cost annual physicals, which may include vision and oral health exams.

In addition, Staples provides many other benefits that support associate well-being – now and in the future. These programs include:

• A “Healthy Choices” discount on paycheck contributions (for associates and covered spouses/domestic partners who either don’t use tobacco or who register for a tobacco coaching program)
• Health dollars for associates’ health accounts
• Cash reimbursements for fitness center participation, select fitness equipment and weight loss programs
• A 24-hour nurse line (allowing associates to speak with a registered nurse 24 hours a day, 7 days a week)
• Employee Assistance Program, including free legal and financial counseling, to help with life’s everyday challenges
• Lifestyle management programs, telephonic coaching and online wellness portal
• Disease management programs
• Cancer Second Opinion Program
• Wellness champions and fairs
• On-site biometric health screenings and flu shots
• Education sessions on topics such as nutrition, physical activity, stress management, parenting tips and financial wellness
• Scholarship program for associates and their dependents
• On-site meetings with financial planners
• Workplace banking programs
• On-site walking programs, and physical activity and weight loss competitions
• Disability and paid and unpaid leave programs
• Free online tool for will preparation and healthcare proxies
• A health portal providing easy access to information and tools to help associates make the most of the benefits that Staples offers
• Many voluntary benefits, including legal and pet insurance, which can be conveniently deducted from an associate’s paycheck
• Financial assistance with adoption expenses
• Company-paid life and accidental death insurance with additional voluntary features
• A retirement plan with auto-enrollment, auto-escalation and default investment features

Read more about Staples’ approach to healthcare.

Ensuring health and safety

Ensuring the health and safety of our associates is a core focus for the company. The management team at Staples is committed to conducting our business in a manner that is safe for our associates, our customers and the communities in which we operate. Core components of Staples' safety program include:

• Visible senior leadership support
• Accountability to results achieved through a cost-comparative chargeback program
• Behavioral-based training and awareness initiatives
• Progressive management response to safety violations
• Positive recognition and incentive programs for safe behaviors and results

In order to deliver on our goals of a safe working environment, we have Occupational Health and Safety (OHS) plans that are reviewed and updated annually based on changes in the business and in local, state and federal regulatory requirements.

In 2012 Staples business units continued to implement business-specific behavioral-based safety programs such as “Safety In Action” (in U.S. stores), “When you gamble with safety, you bet your life” (U.S. Retail Distribution Centers) and “Focus 4 Safety” (North American Delivery). Each is designed to improve site safety by promoting behavioral observation of how associates are working in their job function and by recording correct and incorrect work techniques. Program compliance and feedback are tracked through internal safety audits conducted by field personnel and local safety committee members. Results are communicated and reviewed by management.

Managing occupational health and safety

Staples uses a data-driven approach to manage our occupational health and safety programs. The Risk Management department sends out weekly, monthly and quarterly reports to help inform and educate all associates on program results, injury trends and injury prevention techniques. Based on injury experience and regulatory requirements, we develop new action plans that include enhanced training, new tools and equipment and vendor-provided safety services. For example, we've instituted injury management training for supervisors, safety gloves for cutting, third party injury triage services and active relief therapy (ART), and are currently testing pallet jack guards to help prevent foot injuries.

Each associate completes an annual safety certification. And interim training is provided by location management through individual safety training modules (job aids) that combine both classroom and practical training.

Managing hazardous materials in our operations and products

Hazardous materials need to be safely managed across our operations, from handling in our warehouses to transportation on our fleet. Our compliance and safety teams stay abreast of all pertinent environmental, safety and transportation-related requirements to ensure we are compliant and our associates are safe.

In 2011, prompted by increasing growth in our facilities and breakroom categories, our North American Delivery department worked diligently toward completing a two-year project to streamline the management of all the products we sell – both existing and new – that are regulated by the U.S. Department of Transportation, U.S. Occupational Safety and Health Administration, and, in some cases, states or state consortia. By collecting and maintaining product data at the initial point of entry into our information management systems, we can easily share that information upstream and downstream to give our associates access to the information they need to properly package, mark and label all regulated products. The upgraded system also allows our customers to access important product information (Material Safety Data Sheets) directly from our ordering platforms.