The document describes Best Buy's product safety compliance program. It outlines the governance structure, which includes oversight from the Board of Directors down to operational teams. It details the product incident management process, including review of incidents and recalls. Best Buy has integrated systems to quickly block the sale and distribution of recalled products. It works with third-party partners and provides guidance on new product categories. Continuous improvement is emphasized through monitoring, training, and review of trends.

1. Jay Howell
Sr. Director, Product Safety and Compliance

2. A Perspective on Assessing Compliance Programs

3. Program Fundamentals
Leadership
Risk
Assessment
Standards &
Control
Awareness
Training
Monitoring &
Response

4. Product Safety Compliance
Regulatory
Change
Management
Standards
and
Verification
Product
Removals and
Recalls
Regulatory
Reporting
Program
Monitoring
Program Overview

5. Product Safety Compliance
Risk Mitigation: Work With Supply Chain

6. Product Safety Compliance
Risk Mitigation: Product Verification*
Send
Purchase
Orders
Confirm test
requirements
Generate
certificate
Manage
exceptions
Lab
sends
results
Request test
results, if needed
Use existing test
if available
*Select private brand and direct import general merchandise products

7. Product Safety Compliance
Thank You
Regulatory
Change
Management
Standards
and
Verification
Product
Removals
and Recalls
Regulatory
Reporting
Program
Monitoring
Responsibl
e Product
Stewardshi
p
Identifying
Mitigating
Monitoring

8. Consumer Product Safety Commission
Compliance Program Seminar
Lisa Pankiewicz
Vice President, Global
Stewardship
The Clorox Company
November 1, 2018

9. 2018
1 9 1 3

10. Diverse Product Portfolio
Cleaning: 34%
Household: 32%
FY18
$6.1B
in Sales
International: 17%
Lifestyle: 17%
14%
9%
7%
Home Care 19%
Laundry 9%
Professional
6%
3
9%
4%
3%
3%
Commitment to Safety

11. Safety Compliance Functions
Corporate
Governance
Global
Stewards
hip
Quality
Legal

12. Corp
Governance
Team
Product Regulatory
Compliance Team
All Functions
Business Units
Safety Compliance Infrastructure
Notification and Escalation

13. Safety Compliance Core Processes
Intake &
Escalation
Product Issue
Team (“PIT”)
Recall Process

14. Compliance Program- Role of Technology
7
How is technology changing Clorox’s compliance
program?
 Ability to integrate multiple systems
 Monitor and track data from a variety of sources
 Ability to perform advanced data analysis
Identify trends
Proactive avoidance of potential issues
 Advanced software tools to assist in capturing potential
safety concerns

15. Compliance Program- 3rd Party Integration
8
How does Clorox ensure that third party logistic
providers and other supply chain partners are
integrated into our compliance program?
Supply contracts and quality agreements
Change control
Shared communication
Integrated quality systems/processes
Supplier performance management program

16. Compliance Program- Audit Checks
9
What checks/audits/stress tests does Clorox employ in
order to ensure its compliance program effectively
works as intended?
Robust end-to-end audit processes
Internal audits
Raw material & packaging suppliers
Co-packers & contract manufacturers
3rd party service providers
Product performance / quality monitoring
Mock recalls

17. Compliance Program- Customer Integration
10
How does Clorox integrate safety and quality/customer
care programs to ensure that information is shared
among all relevant divisions?
Centralized data system to manage and analyze product
issues from various sources (consumer, customer/retailer,
social media etc.)
Comprehensive metrics focused specifically on tracking
and trending complaint data
Information is shared with the appropriate functions and
business units
Escalation and notification
CAPA / OTV
Continuous improvement

18. Thank You
11

19. The Manhattan Toy Company
Compliance Program

20. Founded: 1978, in New York City by Francis Goldwyn
(grandson of Hollywood studio mogul Samuel
Goldwyn)
Goldwyn eventually sold Manhattan Toy
Moved to its current home in Minneapolis, Minnesota
Company Size: 28 employees at HQ
15 employees at warehouse
3 employees at European sales office
Product offering: approximately 500 sku’s
Retail Customers:
Specialty Boutique Market
Target, Barnes & Noble, Amazon
Harrods, John Lewis
Brands:
Groovy Girls, Baby Stella, Winkel, Skwish
Dr. Seuss, Wimmer Ferguson
COMPANY OVERVIEW
COMPLIANT FOR SALE
IN
THE U.S., CANADA AND
EUROPE

21. COMPLIANCE PROGRAM
DESIGN
FACTORIES
SAFETY TESTING
INSPECTIONS
CTPAT
ASSOCIATION
MEMBERSHIPS

22. KNOWLEDGEABLE DESIGN
TEAM:
• Design product with
compliance in mind
• Aware of toy safety
requirements
• Age Grade
QA OVERSIGHT:
• Quality Assurance Manager
attends all product
development meetings
• Product is reviewed for safety
compliance as it is being
designed
INFORMED DESIGN

23. WORK WITH A CAREFULLY CULTIVATED FACTORY PORTFOLIO:
• Factories specialize in toy manufacturing
• Have an in-depth understanding of toy safety regulations throughout the world
• Maintain long-term relationships with factories to build partnerships –
collaborate for mutual success – factories know our product, quality
requirements and design aesthetic
• Regular factory visits
• Require all factories to be ICTI certified (or other ethical audit)
FACTORY PARTNERS

24. STRATEGIC PARTNERSHIP:
Work exclusively with UL (Underwriter’s
Laboratories) for all of our safety and
compliance testing
• As a small company, we do not have teams of
people in a compliance department - UL is our
compliance team
• Contractual arrangement ensures they are
integrated into our compliance program
• Resource of experts - safety testing,
regulatory compliance, determining
appropriate age grade, and evaluating new
materials
SAFETY TESTING

25. ALL PRODUCT IS INSPECTED BEFORE IT SHIPS:
• Maintain a China-based team that conducts all of our final random
inspections
• Dedicated team that includes our China Operations Manager and
two Field Inspectors who work exclusively for Manhattan Toy
• Their long-term relationship with our company ensures they are
well acquainted with our product line, understand our quality
requirements and are loyal to Manhattan Toy (their pride in the
company ensures they are tough in their assessments)
• Utilize reputable outside inspection services when our team is fully
booked – we typically employ UL for additional inspection services
• We adhere to ANSI (American National Standards Institute) tables
in determining acceptable quality limits for product inspections
INSPECTION STRATEGY

26. CUSTOMS TRADE PARTNERSHIP AGAINST TERRORISM:
• Part of U.S. Customs and Border Patrol’s cargo enforcement strategy
• Manhattan Toy is a member and has been certified
• Verifies that we have processes and procedures in place to verify a secure
supply chain
• Requires that we meet customs minimum requirements and review our
supply chain security annually
CTPAT

27. ASSOCIATION MEMBERSHIPS

28. BEST BUY INTERNAL USE ONLY. DO NOT COPY, PUBLISH OR DISTRIBUTE. THE MATERIAL IN THIS DOCUMENT IS CONFIDENTIAL TO BEST BUY.
Best Buy
Compliance Program
Product Safety
28

29. BEST BUY INTERNAL USE ONLY. DO NOT COPY, PUBLISH OR DISTRIBUTE. THE MATERIAL IN THIS DOCUMENT IS CONFIDENTIAL TO BEST BUY.
Product Compliance Governance Structure
29
BoD
Quarterly
Compliance &
Risk Committee
Bi-monthly
PC Governance
Committee
Weekly
Operational Teams
As needed
Business Strategy,
Product Strategy
New/Change in
Legislation – impacts
and actions, Non-
compliance – actions,
Risk assessments, etc.
Product Compliance,
Private Label, Legal
Audit Committee
CRCO, GC, SVPs, VPs
*Typical meeting rhythms. Subject to change.

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Product Incident Management
30
Case management system

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Product Incident Review Process
31

32. BEST BUY INTERNAL USE ONLY. DO NOT COPY, PUBLISH OR DISTRIBUTE. THE MATERIAL IN THIS DOCUMENT IS CONFIDENTIAL TO BEST BUY.
Product Recalls and Withdrawals
32
Recall
entered
in system
System
communicates
and assigns tasks
to multiple teams
Block SKU sales
Remove product from shelf
Cancel open orders
Remove from website
Post recall notice online
Tweet recall
Notify Customer Care
Examples
Remove from inventory

33. BEST BUY INTERNAL USE ONLY. DO NOT COPY, PUBLISH OR DISTRIBUTE. THE MATERIAL IN THIS DOCUMENT IS CONFIDENTIAL TO BEST BUY.
Integrated System Blocks
33
Product
Information
System
Point Of
Sale
Orders
Services
Online
Updates
Store
Removal
Sales
Channels
• Block sales
• Remove from shelves
and quarantine
• Cancel open orders
• Identify in-flight
service orders
• Block sales all
channels, including
o Secondary
Markets
o B2B
o Specialty retail
• Remove online
display and post
recall notice

34. BEST BUY INTERNAL USE ONLY. DO NOT COPY, PUBLISH OR DISTRIBUTE. THE MATERIAL IN THIS DOCUMENT IS CONFIDENTIAL TO BEST BUY.
Third Party Partnerships
34

35. BEST BUY INTERNAL USE ONLY. DO NOT COPY, PUBLISH OR DISTRIBUTE. THE MATERIAL IN THIS DOCUMENT IS CONFIDENTIAL TO BEST BUY.
Provide Guidance
35
• New product types
• Emerging technologies
• Children’s products
• Health care products
• Rideables
• Lithium ion batteries

36. BEST BUY INTERNAL USE ONLY. DO NOT COPY, PUBLISH OR DISTRIBUTE. THE MATERIAL IN THIS DOCUMENT IS CONFIDENTIAL TO BEST BUY.
Monitoring and Continuous Improvement
36
• Monthly, quarterly, and
yearly review of
product incidents to
identify trends
• Same day confirmation
of sales blocks at all
store locations
• Monitoring of recall
task completion
• Hourly systematic check
confirming recalled items
are set as recalled (auto
corrects)
• Required annual recall
training for front line
employees

37. BEST BUY INTERNAL USE ONLY. DO NOT COPY, PUBLISH OR DISTRIBUTE. THE MATERIAL IN THIS DOCUMENT IS CONFIDENTIAL TO BEST BUY.
Thank you.
37