Corporate Governance of McDonalds

Corporate governance of McDonalds

Corporate Governance Principles

McDonald’s Corporation’s Board of Directors is entrusted with, and responsible for, the oversight of the assets and business affairs of McDonald’s Corporation in an honest, fair, diligent and ethical manner. This Board has long believed that good corporate governance is critical to our fulfilling our obligations to shareholders. We firmly believe that good governance is a journey, not a destination. Therefore, we are committed to reviewing our governance principles at least annually, with a view to continuous improvement. As our governance processes evolve, we will change this document. One thing that we will not change, however, is our commitment to ensuring the integrity of the Company in all of its dealings with stakeholders. Our continued focus on leadership in corporate governance is an integral part of fulfilling our commitment to shareholders.

Adopted by the Board of Directorswith effect as of January 21, 2010

Roles and Responsibilities

1. Role of the Board – The Board, which is elected by the shareholders, is the ultimate decision-making body of the Company, except with respect to matters reserved to shareholders. The primary function of the Board is oversight. The Board, in exercising its business judgment, acts as an advisor and counselor to senior management and defines and enforces standards of accountability – all with a view to enabling senior management to execute their responsibilities fully and in the interests of shareholders. The following are the Board's primary responsibilities, some of which may be carried out by one or more Committees of the Board or the independent Directors as appropriate:

o Overseeing the conduct of the Company's business so that it is effectively managed in the long-term interests of shareholders;

o Selecting, evaluating and compensating the Chief Executive Officer (CEO) and planning for CEO succession, as well as monitoring management’s succession planning for other key executives;

o Overseeing and reviewing the Company’s strategic direction and objectives, taking into account (among other considerations) the Company's risk profile and exposures;

o Monitoring the Company’s accounting and financial reporting practices and reviewing the Company’s financial and other controls;

o Overseeing the Company’s compliance with applicable laws and regulations; ando Overseeing the processes that are in place to safeguard the Company’s assets and

mitigate risks.

In performing its oversight function, the Board is entitled to rely on the advice, reports and opinions of management, counsel, auditors and outside experts. In that regard, the Board and its Committees shall be entitled, at the expense of the Company, to engage such independent legal, financial or other advisors as they deem appropriate, without consulting or obtaining the approval of any officer of the Company.

2. Role of the Chairman – The Chairman shall be a member of the Board of Directors and may, or may not be, an officer or employee of the Company. A non-executive Chairman shall not be an officer or employee of the Company. The principal duty of the Company’s Chairman is to lead and oversee the Board of Directors. The Chairman should facilitate an open flow of information between management and the Board, and should lead a critical evaluation of Company management, practices and adherence to the Company’s strategic plan and objectives. In

accordance with the Company’s By-laws, the Chairman shall preside at all meetings of the Board and the shareholders. The Chairman, in consultation with the CEO, shall also establish an agenda for each meeting of the Board.

3. Role of the CEO and Management – The Company's business is conducted by its employees, managers and officers, under the direction of senior management and led by the CEO. In carrying out the Company’s business, the CEO and senior management are accountable to the Board and ultimately to shareholders. Management’s primary responsibilities include the day-to-day operation of the Company’s business, strategic planning, budgeting, financial reporting and risk management; and in fulfilling those responsibilities, management must balance the unique relationships between and among the McDonald’s System of employees, franchisees and suppliers.

Composition of the Board

4. Size and Structure of the Board – The Board itself determines its size within the range of 11 to 24 members required by the Company’s Certificate of Incorporation. The Board believes that, at this time, the desirable number of Directors is between 11 and 15. In the event of a vacancy on the Board, the Directors may either fill the vacancy or decrease the size of the Board, in accordance with the terms of the Company's Certificate of Incorporation. The Board shall periodically review its structure, considering (among other things) the existing composition of the Board, voting results for Directors in recent elections by shareholders, staggered terms, legislative and regulatory developments, trends in governance, the Company's circumstances at the time, how a particular structure could affect the unique relationships between and among the McDonald's System of employees, franchisees and suppliers, and such other factors as the Board may deem relevant.

5. Qualifications and Selection of Directors – The Governance Committee is responsible for selecting candidates for Board membership, subject to Board approval, and for extending invitations to join the Board. In selecting candidates, the Board endeavors to find individuals of high integrity who have a solid record of accomplishment in their chosen fields and who display the independence of mind and strength of character to effectively represent the best interests of shareholders. Candidates are selected for their ability to exercise good judgment, and to provide practical insights and diverse perspectives. Consistent with its charter, the Governance Committee is responsible for screening candidates, for establishing criteria for nominees (which shall be described in the Company's annual proxy statement and published on the Company's website), and for recommending to the Board a slate of nominees for election to the Board at the Annual Meeting of Shareholders. Candidates are approved by the full Board. The Board shall consider only those candidates for election or re-election to the Board who submit all information required under the Company's By-Laws and these Principles.

6. Independence of Directors – All Directors except the CEO shall be independent. An independent Director is one who is free of any relationship with the Company or its management that may impair, or appear to impair, the Director’s ability to make independent judgments. The Board of Directors determines each Director’s independence after reviewing pertinent facts and circumstances in accordance with these Principles and the independence standards established by the Board. If a change in circumstance affects an independent Director’s continuing independence under the Board’s independence standards, that Director is expected to offer to submit his or her resignation to the Chair of the Governance Committee. The Governance Committee shall determine whether to accept or reject such offer.

7. Management Director – The only management member of the Board shall be the CEO. The CEO is expected to resign from the Board at the time that his or her service in that capacity terminates.

8. Retirement; Term Limits – The Board does not believe that arbitrary term limits for Directors based on age or years of service are appropriate, as they may sometimes force the Company to lose the contribution of Directors who have over time developed increased insight into the Company and its operations. However, a Director’s service should not outlast his or her ability to contribute and consequently the Board does not believe that Directors should expect to be renominated continually. Each Director’s continued tenure shall be re-considered at the end of his or her term, taking into account the results of the Board’s most recent self-evaluation and Director peer evaluations. It is the Board’s intent to maintain a balance of Directors who have longer terms of service and those who have joined more recently.

Board Leadership

9. Selection of CEO and Chairman – The independent Directors shall annually elect the CEO and the Chairman. The independent Directors will exercise their discretion in combining or separating the positions of Chairman and CEO, as they deem appropriate in light of the Company's prevailing circumstances.

10. Presiding Director – The role of the Presiding Director is to preside at all executive sessions of the Board of Directors and to be an avenue for communications with independent Directors. If the Company has a non-executive Chairman, then the Chairman shall be the Presiding Director. If the Chairman is a management Director, the Chair of the Governance Committee shall be the Presiding Director.

Responsibilities and Conduct of Directors

11. Responsibilities of Directors – Directors must devote sufficient time and attention, and meet as frequently as necessary, to discharge their responsibilities. In discharging their responsibilities, Directors must exercise their business judgment and act in a manner that they believe in good faith is in the long-term best interests of the Company and its shareholders. Directors are expected to attend the Company’s Annual Meeting of Shareholders, and all or substantially all Board meetings and meetings of the Committees of the Board on which they serve. Directors are also expected to spend whatever additional time as may be necessary for them to discharge their responsibilities appropriately. Directors shall ensure that other existing or future commitments do not materially interfere with their ability to fulfill their responsibilities as Company Directors.

12. Other Board Service by the CEO – The CEO shall not serve on the boards of more than two for-profit companies, in addition to the McDonald’s Board. The CEO shall obtain the approval of the Board before accepting an invitation to serve on the board of another for-profit company.

13. Other Board Service by Independent Directors

Functioning of the Board

18. Board Meetings – The Board of Directors meets at least six times a year. Additional meetings are scheduled as necessary or appropriate in light of prevailing circumstances. The Chairman chairs all meetings of the Board of Directors. The Chairman, in consultation with the CEO, establishes an agenda for each meeting. Agendas are set so as to ensure that the Board will be able to fulfill its oversight responsibilities. Directors may at any time suggest the addition of any matters to a meeting agenda or raise for discussion at any meeting any subject that they wish, whether or not it is on the agenda for the meeting. The Secretary attends all meetings of the Board and records the minutes. The Chief Operating Officer, Chief Financial Officer and General Counsel also attend meetings of the Board. Any one or all of these officers may be excused from all or any portion of a Board meeting at the request of any Director.

19. Executive Sessions – The Board of Directors refers to meetings of the independent Directors as “executive sessions.” The Presiding Director chairs executive sessions; however, he or she may choose to defer to a Committee Chair when the subject matter of the meeting falls within the purview of a Board Committee. The independent Directors, led by the Presiding Director, determine the frequency, length and agenda for executive sessions. An executive session is generally scheduled immediately before or after each regular Board meeting.

20. Site Visits – Directors are expected to visit Company facilities throughout the year. Periodically, the Board may meet away from the Company’s headquarters in order to visit certain of the Company’s operations and provide the Directors the opportunity to meet with local management.

21. Information to be Distributed Prior to Meetings – Information regarding the Company’s business and performance is distributed to all Directors on a regular basis. In addition, business updates and information regarding recommendations for action by the Board at a meeting shall be made available to the Board a reasonable period of time before meetings.

Functioning of Committees

22. Committee Structure – The Board believes that the Company benefits from its collective wisdom, and therefore the Board as a whole will deal with major corporate decisions. There are, however, certain key areas that require more in-depth examination than might be possible at a full Board meeting. Accordingly, the Board has established six standing Committees: Audit, Compensation, Corporate Responsibility, Executive, Finance and Governance. The Board may also establish ad hoc committees from time to time as circumstances and business activities warrant.

23. Committee Charters – Each standing Committee shall have a written charter that shall be approved by the full Board, upon the recommendation of the Governance Committee. Each Committee charter shall state the purpose of the Committee and reflect the responsibilities that the Committee has undertaken. Each Committee shall review its charter annually and recommend amendments to it as appropriate to reflect changes in the Committee’s responsibilities, applicable law or regulations, and other relevant considerations.

24. Committee Membership – Committees and their Chairs shall be appointed by the Board annually at the Annual Meeting of the Board, on recommendation of the Governance Committee. The Governance Committee will take into account the experience and expertise needed to fulfill each Committee's responsibilities in its annual review of Committee membership. It is the Board’s policy that, with the exception of the Executive Committee, only independent Directors shall serve on the standing Committees. The members of the Audit, Compensation and Governance Committees shall at all times meet the requirements of applicable law and listing standards.

25. Committee Meetings – In order to discharge its responsibilities, each Committee shall each year establish a schedule of meetings. The Chair of the Committee, in consultation with members of management, if appropriate, shall determine the agenda of that Committee's meetings. Information regarding matters to be considered at Committee meetings shall be distributed to Committee members a reasonable period of time before such meetings. The Chair of each Committee shall report on the activities of the Committee to the Board following Committee meetings, and minutes of Committee meetings shall be distributed to all Directors for their information.

Board Compensation & Share Ownership

26. Board Compensation – Management Directors shall not be compensated for their services as Directors. The Governance Committee shall determine the form and amount of compensation for independent Directors, including the non-executive Chairman, if applicable, subject to approval of the full Board of Directors. The Committee shall be sensitive to questions of independence that

may be raised where Director fees and expenses exceed customary levels for companies of comparable scope and size.

27. Share Ownership by Directors – The Board of Directors believes that an alignment of Director interests with those of shareholders is important. All Directors are expected to own stock in the Company in accordance with the policy established by the Governance Committee.

Leadership Development

28. Annual Review of Management Performance – After consulting with the independent Directors the Chairs of the Compensation and Governance Committees shall approve the annual goals and objectives of the CEO, which shall be consistent with the Company’s goals and objectives relevant to the CEO’s compensation established annually by the Compensation Committee in accordance with its Charter. In order to ensure alignment in these discussions and in evaluating the CEO’s performance, the Chair of the Compensation Committee shall be a member of the Governance Committee. Each year, the Chairs of the Compensation and Governance Committees shall consult with the independent Directors in evaluating the CEO's performance and shall thereafter jointly provide the CEO with a performance review for the preceding year. Consistent with this evaluation, the Compensation Committee shall establish the CEO's salary, bonus and other incentive and equity compensation for the year. In addition, the Compensation Committee shall also annually approve the compensation structure for the Company's officers, and shall approve the salary, bonus and other incentive and equity compensation for the Company’s officers above the level of Vice President.

29. Succession Planning – The Board shall regularly review leadership development initiatives and short- and long-term succession plans for the CEO and other senior management positions, including in the event of unanticipated vacancies in those offices. The Board is responsible for the selection of the CEO. In assessing the possible CEO candidates as part of its annual review of succession plans, the independent Directors shall identify and periodically update the skills, experience and attributes that they believe are required to be an effective CEO in light of the Company’s business strategy, prospects and challenges. The Board shall also take into account perspectives provided by the incumbent CEO relating to the performance of internal candidates.

30. Board Self-Evaluations – The Governance Committee shall annually evaluate the performance of the Board of Directors as a whole. Individual Directors shall be evaluated periodically, but in no event less often than each time they are slated for re-election. In completing these evaluations, the Governance Committee may choose to benchmark the practices of other boards of directors; circulate surveys, questionnaires and evaluation forms; hire outside consultants and advisors; and use such other methods as it may deem helpful and appropriate. At the conclusion of the evaluation process the Chair of the Governance Committee shall report the Committee’s conclusions to the full Board and may make recommendations for improvement to the full Board.

31. Committee Self-Evaluations – Each of the Audit, Compensation, and Governance Committees shall annually evaluate its performance as a Committee. Each of the Corporate Responsibility and Finance Committees shall periodically (at least every two years) evaluate its performance as a Committee. At the conclusion of the evaluation process, the Chair of each respective Committee shall report the Committee’s conclusions to the full Board and may make recommendations for improvement to the full Board.

32. Director Orientation and Education – New non-management Dectors shall participate in an orientation process, which shall address the Company's operations, performance, strategic plans, and corporate governance practices, and shall include introductions to members of the Company's senior management and their respective responsibilities. All Directors are encouraged to

participate in continuing education programs, and the Company shall pay the reasonable expenses of attendance by a Director at one such program per year.

Communications

33. Access to Management and Information – In order to fulfill their oversight responsibilities, Directors shall have free access to Company management and employees. The Board encourages the Chairman to invite members of management to make presentations at Board meetings in order to provide particular insights into aspects of the Company's business or to provide individuals with exposure to the Board for purposes of management development. Management shall be responsive to all requests for information from Board members.

34. Board Interaction with Institutional Investors, the Press and other Constituencies – The Board believes that as a general matter, management speaks for the Company. Non-management Directors should refrain from communicating with various constituencies involved with the Company without prior approval from the Chairman and appropriate members of management. In situations where public comments from the Board may be appropriate, they should come only from the Chairman.

35. Public Communications with the Board – The Board of Directors shall provide a means by which persons, including shareholders and employees, may communicate directly with Directors with regard to matters relating to the Company’s corporate governance and performance. The Board’s independent Directors shall approve a process to be maintained by the Company’s management for collecting and distributing communications with the Board. The means of communications with the Board shall be disclosed in the Company’s annual proxy statement.

Shareholder Practices

36. Shareholder Nominations – Shareholders may suggest Director candidates for consideration by the Governance Committee by writing to the Committee and providing the suggested candidate’s name, biographical data, qualifications and the candidate’s written consent (i) to be considered as a nominee; (ii) to provide information as described in the Company's By-Laws if requested to do so; and (iii) to serve as a Director if elected. Shareholders who wish to nominate Director candidates for election by shareholders at the Company’s Annual Meeting of Shareholders may do so in accordance with the provisions for nomination described in the Company’s By-Laws.

37. Consideration of Shareholder Proposals – The Governance Committee shall review and make recommendations to the Board with respect to any proposal properly presented by a shareholder for inclusion in the Company’s annual proxy statement. The Governance Committee may also, as appropriate in light of the subject matter of the proposal, refer any such proposal to any other Committee of the Board for purposes of such review and recommendations. In considering a proposal, any applicable Committee of the Board may seek input from an independent advisor and/or legal counsel.

38. Confidential Voting – It is the Company’s policy to protect the confidentiality of shareholder votes throughout the voting process. The policy in this regard shall be disclosed in the Company’s annual proxy statement.

Other Guidelines and Policies

In addition to these Principles and the Committee charters, the Board and its Committees will from time to time establish operating procedures, guidelines and policies that pertain to their respective oversight functions. The Secretary of the Company is charged with maintaining copies of these guidelines and policies.

Adopted by the Board of Directors with effect as of January 21, 2010

Code of Conduct for the Board of Directors

The members of the Board of Directors of McDonald’s Corporation acknowledge and accept the scope and extent of our duties as Directors. We have a responsibility to carry out our oversight responsibility in the interests of all McDonald's shareholders, within the scope of our authority and consistent with our fiduciary duties and our governance documents. The Board of Directors has adopted the following Code of Conduct and our Directors are expected to adhere to the standards of loyalty, good faith, and the avoidance of conflict of interest that follow:Board Members will:

Act in the best interests of, and fulfill their fiduciary obligations to, all McDonald’s shareholders; Act honestly, fairly, ethically and with integrity; Conduct themselves in a professional, courteous and respectful manner; Comply with all applicable laws, rules and regulations; Act in good faith, responsibly, with due care, competence and diligence, without allowing their

independent judgment to be subordinated; Act in a manner to enhance and maintain the reputation of McDonald’s; Disclose any potential conflicts of interest, including those that they may have regarding any

matters that may come before the Board, and abstain from discussion and voting on any matter in which they have or may have a conflict of interest;

Make available to and share with fellow Directors information as may be appropriate to ensure proper conduct and sound operation of McDonald’s and its Board of Directors;

Respect the confidentiality of information relating to the affairs of the Company acquired in the course of their service as Directors, except when authorized or legally required to disclose such information; and

Not use confidential information acquired in the course of their service as Directors for their personal advantage.

A Director who has concerns regarding compliance with this Code should raise those concerns with the Chairman of the Board and the Chair of the Governance Committee, who will determine what action shall be taken to deal with the concern. In the extremely unlikely event that a waiver of this Code for a Director would be in the best interest of the Company, it must be approved by the Governance Committee. Directors will annually sign a confirmation that they have read and will comply with this Code.

Originally Adopted by the Board of DirectorsAs of May 22, 2003

Revised by the Board of DirectorsAs of July 19, 2010

Board Committees & Charters

The Audit Committee reviews the performance, and recommends to the Board the selection and retention, of the Company’s independent auditors. The Audit Committee reviews with the internal auditors and the independent auditors the overall scope and results of their respective audits, the internal accounting and financial controls and the steps management has taken to monitor and control the Company’s major risk exposure.

The Compensation Committee evaluates the performance of the Company’s Chief Executive Officer in consultation with the outside Directors and recommends his compensation to the Board annually; reviews and approves senior management’s compensation; and establishes compensation guidelines for all other

officers. The Committee administers the Company’s incentive compensation and stock option plans and develops compensation policies. The Committee has oversight for the detailed disclosure requirements regarding executive compensation.

The Governance Committee sets criteria for Board membership; searches for and screens candidates to fill Board vacancies; recommends appropriate candidates for election each year and, in this regard, evaluates individual Director performance; assesses overall Board performance; considers issues regarding Board composition and size; recommends to the Board the compensation paid to outside Directors; and evaluates the Company’s corporate governance process. The Committee also considers and makes recommendations to the Board regarding shareholder proposals for inclusion in the Company's annual Proxy Statement. In addition, under our majority voting standard for uncontested Director elections, if an incumbent Director fails to be re-elected, the Committee is responsible for making a recommendation to the Board about whether to accept the Director's resignation. The Corporate Responsibility Committee acts in an advisory capacity to the Company’s management with respect to policies and strategies that affect the Company’s role as a socially responsible organization, including issues pertaining to product safety, workplace safety, employee opportunities and training, diversity, the environment and sustainable supply chain initiatives. The Board also has an Executive Committee and a Finance Committee. The Executive Committee may exercise most Board powers during the period between Board meetings

The Finance Committee ensures that the Company's significant financial policies and plans, such as its dividend policy and share repurchase program are considered in appropriate detail in light of the Company's overall strategy and performance. The Committee has principal oversight responsibility with respect to certain material financial matters, including the Company's treasury activities, as well as acquisitions and divestitures that are significant to the Company's business. The Committee annually reviews the Company's worldwide insurance program, banking and trading arrangements, and policies with respect to dividends and share repurchase.

Audit Committee Charter

I. Statement of Purpose

The Audit Committee is a standing committee of the Board of Directors. The purpose of the Committee is to assist the Board of Directors in fulfilling its oversight responsibility relating to (i) the integrity of the Company’s financial statements and financial reporting process and the Company’s systems of internal accounting and financial controls; (ii) the performance of the internal auditors; (iii) the annual independent audit of the Company’s financial statements, the engagement of the independent auditors and the evaluation of the independent auditors’ qualifications, independence and performance; (iv) the compliance by the Company with legal and regulatory requirements, including the Company’s disclosure controls and procedures; (v) the evaluation of management's process to assess and manage the Company's enterprise risk issues; and (vi) the fulfillment of the other responsibilities set out herein. The Committee shall also prepare the report of the Committee required to be included in the Company’s annual proxy statement.

In discharging its responsibilities, the Committee is not itself responsible for the planning or conduct of audits or for any determination that the Company’s financial statements are complete and accurate or in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditors.

II. Organization

1. Charter. At least annually, this charter shall be reviewed and reassessed by the Committee and any proposed changes shall be submitted to the Board of Directors for approval.

2. Members. The members of the Committee shall be appointed by the Board of Directors and shall meet the independence and experience requirements of applicable law, the listing standards of the New York Stock Exchange and applicable policies of the Board of Directors. The Committee shall be comprised of at least three members, at least one of whom shall meet the expertise requirements of the listing standards of the New York Stock Exchange. Committee members may be removed by the Board of Directors. The Board of Directors shall also designate a Committee Chairperson.

3. Meetings. In order to discharge its responsibilities, the Committee shall each year establish a schedule of meetings; additional meetings may be scheduled as required. In planning the annual schedule of meetings, the Committee shall ensure that sufficient opportunities exist for its members to meet separately with the independent auditors, the head of internal audit and management, and to meet in private with only the Committee members present.

4. Agenda, Minutes and Reports. An agenda, together with materials relating to the subject matter of each meeting, shall be sent to members of the Committee prior to each meeting. Minutes for all meetings of the Committee shall be prepared to document the Committee’s discharge of its responsibilities. The minutes shall be circulated in draft form to all Committee members to ensure an accurate final record, shall be approved at a subsequent meeting of the Committee and shall be distributed periodically to the full Board of Directors. The Committee shall make regular reports to the Board of Directors.

5. Performance Evaluation. The Committee shall evaluate its performance on an annual basis and establish criteria for such evaluation.

III. Responsibilities

1. Engagement of Independent Auditors. The Committee shall directly appoint, retain, compensate, evaluate and terminate the Company’s independent auditors. The Committee shall have the sole authority to approve all engagement fees to be paid to the independent auditors. The independent auditor shall report directly to the Committee.

2. Determination as to Independence and Performance of Independent Auditors. The Committee shall receive periodic reports from the independent auditors as required under generally accepted auditing standards, applicable law or listing standards regarding the auditors’ independence, which shall be not less frequently than annually. The Committee shall discuss such reports with the auditors, and if so determined by the Committee, take appropriate action to satisfy itself of the independence of the auditors. The Committee shall review the performance of the Company’s independent auditors annually. In doing so, the Committee shall consult with management and the Company’s internal auditors and shall obtain and review a report by the independent auditors describing their internal control procedures, material issues raised by their most recent internal quality control review, or by any inquiry or investigation by governmental or professional authorities within the preceding five years and the response of the independent auditors. The Committee shall consider whether or not there should be a regular rotation of the independent audit firm. Any selection of the auditors by the Committee may be subject to shareholders’ approval, as determined by the Board of Directors.

3. Audits by Independent Auditors. The Committee shall discuss with the independent auditors the overall scope, plans and budget for the audit, including the adequacy of staffing and other factors that may affect the effectiveness of the audit. In this connection, the Committee shall discuss with financial management, the internal auditors and the independent auditors the Company’s major risk exposures (whether financial, operating or otherwise), the adequacy and effectiveness of the

accounting and financial controls, and the steps management has taken to monitor and control such exposures and manage legal compliance programs, among other considerations that may be relevant to the audit. The Committee shall review with financial management and the independent auditors management’s annual internal control report.

4. Review of the Internal Audit Plan and Performance and Communications with Internal Auditors.The Committee shall annually review the structure, resources and performance of the Company’s internal audit department. In that regard, the Committee shall discuss with the internal auditors the overall scope, plans and budget for the annual internal audit plan, including the adequacy of staffing and other factors that may affect the effectiveness and timeliness of the internal audits. In addition, the internal auditors shall report periodically to the Committee regarding any significant deficiencies in the design or operation of the Company’s internal controls, material weaknesses in internal controls and any fraud (regardless of materiality) involving persons having a significant role in the internal controls, as well as any significant changes in internal controls implemented by management during the most recent reporting period of the Company.

5. Pre-Approval of Audit and Non-Audit Services. The Committee shall establish and maintain guidelines for the retention of the independent auditors for any non-audit service and the fee for such service and shall determine procedures for the approval of audit and non-audit services in advance. The Committee shall, in accordance with such procedures, approve in advance any audit or non-audit service provided to the Company by the independent auditors, all as required by applicable law or listing standards.

6. Review of Annual SEC Filings. The Committee shall review with management and the independent auditors the Company’s Annual Report on Form 10-K, including the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” their judgment about the quality, not just acceptability, of accounting principles, the reasonableness of significant judgments, the clarity of the disclosures in the financial statements and the adequacy of internal controls. The Committee shall also discuss the results of the annual audit and any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards, applicable law or listing standards, including matters required to be discussed by Statement on Auditing Standards No. 61, as amended by Statement on Auditing Standards No. 90. The Committee may discuss with the national office of the independent auditors issues on which it was consulted by the Company’s audit team and matters of audit quality and consistency. Based on such review and discussion, the Committee shall make a determination whether to recommend to the Board of Directors that the audited financial statements be included in the Company’s Form 10-K.

7. Review of Quarterly SEC Filings and Other Communications. The Committee shall meet to review and discuss with management and the independent auditors the quarterly financial information to be included in the Company’s Quarterly Reports on Form 10-Q, including the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and shall discuss any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards, applicable law or listing standards. Management shall review and discuss the Company's quarterly earnings press releases with the Committee Chairman prior to their issuance. The Committee shall also periodically review and discuss the Company's earnings press releases as well as the types of financial information provided to analysts and rating agencies. The Committee shall also discuss the results of the independent auditors’ review of the Company’s quarterly financial information conducted in accordance with Statement on Auditing Standards No. 71.

8. Review of Disclosure Controls and Procedures. The Committee shall review with the Chief Executive Officer, the Chief Financial Officer and the General Counsel the Company’s disclosure controls and procedures and shall review periodically, but in no event less frequently than quarterly, management’s conclusions about the effectiveness of such disclosure controls and

procedures, including any significant deficiencies in, or material non-compliance with, such controls and procedures.

9. Review of Certain Matters with Internal and Independent Auditors. The Committee shall review periodically with financial management, the internal auditors and independent auditors the effect of new or proposed regulatory and accounting initiatives on the Company’s financial statements and other public disclosures.

10. Consultation with Independent Auditors. The Committee shall review with the independent auditors any problems or difficulties the auditors may have encountered in connection with the annual audit or otherwise, any management letters provided to the Committee and the Company’s responses. Such review shall address any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information, any disagreements with management regarding generally accepted accounting principles and other matters, material adjustments to the financial statements recommended by the independent auditors and adjustments that were proposed but “passed”, regardless of materiality.

11. Preparation of Report for Proxy Statement. The Committee shall prepare the report required to be included in the Company’s annual proxy statement, all in accordance with applicable rules and regulations.

12. Employment of Former Audit Staff. The Committee shall establish and maintain guidelines for the Company’s hiring of former employees of the independent auditors, which shall meet the requirements of applicable law and listing standards.

13. “Whistleblowing” Procedures. The Committee shall establish and maintain procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

14. Review of Legal and Regulatory Compliance. The Committee shall periodically review with management, including the General Counsel, and the independent auditors any correspondence with, or other action by, regulators or governmental agencies and any employee complaints or published reports that raise concerns regarding the Company’s financial statements, accounting or auditing matters or compliance with the Company’s Standards of Business Conduct. The Committee shall also meet periodically, and may request to meet separately, with the General Counsel and other appropriate legal staff of the Company, and if appropriate, the Company’s outside counsel, to review material legal affairs of the Company and the Company’s compliance with applicable law and listing standards.

15. Review of Related Person Transactions. The Committee shall review periodically the Company's policy with respect to related person transactions and shall review, but no less frequently than annually, a summary of the Company’s transactions with Directors and executive officers of the Company and with firms that employ Directors, as well as any other material related party transactions, for the purpose of recommending to the disinterested members of the Board of Directors that the transactions are fair, reasonable and within Company policy, and should be ratified and approved.

16. Grant of Franchises. The Committee shall approve the appropriateness of an initial grant of franchise(s) to a Company officer or a former Company officer in accordance with the Company’s policy with regard to such grants of franchises. The Committee shall also approve the purchase of restaurants from a franchisee who immediately thereafter becomes a Company officer.

17. Review of Compliance Programs. The Committee shall review annually with the General Counsel the adequacy and appropriateness of the Company’s compliance programs. The review shall include a summary of employees’ compliance with the Company’s Standards of Business Conduct. The Committee shall be responsible for determining whether and on what terms to grant to any executive officer a waiver from the Company’s Standards of Business Conduct.

18. Access to Records, Consultants and Others. The Committee shall have the full resources and authority (i) to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company; (ii) to retain outside legal, accounting or other consultants to advise the Committee; and (iii) to request any officer or employee of the Company, the Company’s outside counsel, internal auditor, internal audit service providers or independent auditors to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.

19. Delegation. The Committee may delegate any of its responsibilities to a subcommittee comprised of one or more members of the Committee. The Committee shall also carry out such other duties that may be delegated to it by the Board of Directors from time to time.

Approved by the Audit Committee

Date: March 18, 2008Approved by the Board of Directors

Date: March 19, 2008Compensation Committee Charter


The Compensation Committee is a standing committee of the Board of Directors. The Committee shall have the authority to determine the compensation of the Company’s executive officers and such other employees as the Committee may decide. The Committee shall also prepare the report of the Committee for inclusion in the Company’s annual proxy statement.II. Organization


2. Members. The members of the Committee shall be appointed by the Board of Directors and shall meet the independence requirements of applicable law, the listing standards of the New York Stock Exchange and applicable policies of the Board of Directors. The Committee shall be comprised of at least three members. Committee members may be removed by the Board of Directors. The Board of Directors shall also designate a Committee Chairperson.

3. Meetings. In order to discharge its responsibilities, the Committee shall each year establish a schedule of meetings. Additional meetings may be scheduled as required.

4. Agenda, Minutes and Reports. The Chairperson of the Committee shall be responsible for establishing the agendas for meetings of the Committee. An agenda, together with materials relating to the subject matter of each meeting, shall be sent to members of the Committee prior to each meeting. Minutes for all meetings of the Committee shall be prepared to document the Committee’s discharge of its responsibilities. The minutes shall be circulated in draft form to all Committee members to ensure an accurate final record, shall be approved at a subsequent meeting of the Committee and shall be distributed periodically to the full Board of Directors. The Committee shall make regular reports to the Board of Directors.


The following shall be the principal responsibilities of the Committee:1. Compensation Philosophy, Programs and Policies. In consultation with senior management,

the Committee shall establish the Company’s general compensation philosophy, and oversee the development and implementation of executive compensation programs and related policies, including any guidelines or requirements as to Company stock ownership by officers of the Company. In undertaking these responsibilities, the Committee shall take into account factors it deems appropriate from time to time, including the Company’s business strategy and risks to the Company and its business implied by such programs. The Committee shall review on a periodic

basis the Company’s executive compensation programs, select an appropriate peer group for purposes of such periodic review, and make any modifications that the Committee may deem necessary or advisable, in its sole discretion.

2. Chief Executive Officer Compensation. The Committee shall annually review and approve the Company’s goals and objectives relevant to the compensation of the Chief Executive Officer and shall evaluate the performance of the Chief Executive Officer in light of those goals and objectives. Based on such evaluation, the Committee shall have the sole authority to set the compensation (including base salary, incentive compensation and equity-based awards) of the Chief Executive Officer. In determining compensation, the Committee shall consider factors it deems appropriate from time to time, including the Company’s performance and relative shareholder return, the nature, extent and acceptability of risks that the Chief Executive Officer may be encouraged to take by such compensation, the value of similar compensation packages for chief executive officers at comparable companies, and the compensation awarded to management in prior years.

3. Officer Compensation. The Committee shall also review and approve the compensation (including base salary, incentive compensation and equity-based awards) of officers above the level of Vice President of the Company and its business unit subsidiaries corresponding to its geographic operating segments, review the compensation of Managing Directors above the equivalent level of Vice President and review and approve compensation guidelines for all other officers.

4. Benefit Plans. The Committee shall review and shall have the authority to amend the Company’s incentive compensation plans, equity-based plans, retirement plans, deferred compensation plans and welfare benefit plans, as the Committee may deem necessary or advisable in its sole discretion, unless otherwise provided by applicable law . Unless their administration is otherwise delegated in accordance with the provisions of such plans or of Article III.L., the Committee shall administer such plans, including determining any incentive or equity-based awards to be granted to members of senior management under any such plan.

5. Post-Service Arrangements and Perquisites. The Committee shall review periodically (i) policies with respect to post-service arrangements covering officers above the level of Vice President, and (ii) the perquisites provided to officers at and above the level of Vice President.

6. Independent Contractors. The Committee shall oversee the development and implementation of policies with respect to the engagement of individuals as independent contractors of the Company.

7. Monitoring of Named Fiduciaries. With respect to any funded employee benefit plan covering employees of the Company subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, the Committee shall monitor, and shall have the authority to appoint or terminate, the named fiduciary or named fiduciaries of such plan, unless constituent plan documents specify an alternative procedure for monitoring or appointment.

8. Compensation Discussion and Analysis; Compensation Disclosures. The Committee shall review and discuss the Compensation Discussion and Analysis section proposed for inclusion in the Company’s Annual Report on Form 10-K and annual proxy statement with management and recommend to the Board whether such section should be so included. In that connection, the Committee shall also review the related tabular and other disclosures about executive compensation proposed by management for inclusion in such Annual Report and proxy statement.

9. Annual Compensation Committee Report. The Committee shall produce an annual report for inclusion in the Company’s annual proxy statement, in accordance with applicable rules and regulations.

10. Committee Performance Evaluation.Governance Committee Charter


The Governance Committee is a standing committee of the Board of Directors. The purpose of the Committee is to identify individuals qualified to become members of the Board, to recommend director nominees for each annual meeting of shareholders and nominees for election to fill any vacancies on the Board of Directors, to advise the Board with respect to the structure and composition of committees of the Board, and to address related matters. The Committee shall have the responsibility to recommend the compensation of the Company’s Directors. The Committee shall also develop and recommend to the Board of Directors corporate governance principles and be responsible for leading the annual review of the Board’s performance. II. Organization


2. Members. The members of the Committee shall be appointed by the Board of Directors and shall meet the independence requirements of applicable law, the listing standards of the New York Stock Exchange and applicable policies of the Board of Directors. The Committee shall be comprised of at least three members, one of whom shall be the Chair of the Board’s Compensation Committee. Committee members may be removed by the Board of Directors. The Board of Directors shall also designate a Committee Chairperson.

3. Meetings. In order to discharge its responsibilities, the Committee shall each year establish a schedule of meetings; additional meetings may be scheduled as required.



1. Director Selection Criteria. The Committee shall establish criteria for selecting new directors, which shall reflect, among other factors, a candidate’s integrity and business ethics, strength of character, judgment, experience and independence, as well as factors relating to the composition of the Board, including its size and structure, the relative strengths and experience of current Board members and principles of diversity.

2. Director Recruitment. The Committee shall consider and recruit candidates to fill new positions on the Board of Directors and shall review any candidate recommended by the shareholders of the Company in accordance with the Company’s By-Laws. As part of this responsibility, the Committee shall conduct appropriate inquiries to establish such candidate’s compliance with the independence and other qualification requirements established by the Committee.

3. Consideration of Directors for Re-Election. In connection with its annual recommendation of a slate of nominees, the Committee shall assess the contributions of those Directors slated for re-election,

and shall at that time review its criteria for Board candidates in the context of the Board evaluation process and other perceived needs of the Board.

4. Recommendation of Nominees to Board. The Committee shall recommend the director nominees for approval by the Board of Directors and the shareholders.

5. Certain Matters Relating to Director Elections. If an incumbent Director fails to receive the required vote for re-election in any uncontested election as provided in the Company's By-Laws and Corporate Governance Principles, the Committee shall determine whether or not to accept the Director's resignation based on such factors as it deems appropriate and relevant, and shall submit its recommendation for consideration by the Board of Directors.

6. Governance Principles. The Committee shall recommend to the Board of Directors corporate governance principles addressing, among other matters, the size, composition and responsibilities of the Board of Directors and its committees, which shall be reviewed not less frequently than annually by the Committee. The Committee shall make recommendations to the Board of Directors with respect to changes to the corporate governance principles.

7. Advice as to Committee Membership and Operations. The Committee shall advise the Board of Directors with respect to the charters, structure and operations of the various committees of the Board of Directors and qualifications for membership thereon, including policies for rotation of members among committees of the Board of Directors.

8. Evaluation of Board, Directors and Committee. The Committee shall evaluate the performance of the Board of Directors on an annual basis. In discharging this responsibility, the Committee shall solicit comments from all Directors and report annually to the Board on its assessment of the Board’s performance. The Committee shall periodically evaluate the performance of individual Directors. The Committee shall also evaluate its own performance on an annual basis and establish criteria for such evaluation.

9. Director Compensation. The Committee shall recommend to the Board of Directors proposed changes in Board compensation, including retainer and meeting attendance fees, as well as other Director compensation program and policies.

10. Evaluation of Executive Management. The Committee shall oversee the evaluation of executive management of the Company.

11. Consideration of Shareholder Proposals. The Committee will review and make recommendations to the Board with respect to any proposal properly presented by a shareholder for inclusion in the Company's annual proxy statement. The Committe may, as appropriate in light of the subject matter of the proposal, refer any such proposal to any other Committee of the Board for purposes of such review and recommendations.

12. Access to Records, Consultants and Others. In discharging its responsibilities, the Committee shall have the resources and sole authority to engage any outside consultant or search firm to be used to identify director candidates for nomination to the Board of Directors, to retain outside consultants to advise the Committee and to approve the terms of any such engagement and the fees of any such consultant or search firm. The Committee shall have full access to any relevant records of the Company and may also request that any officer or other employee of the Company, the Company’s outside counsel or any other person meet with any members of, or consultants to, the Committee.

13. Delegation. The Committee may delegate any of its responsibilities to a subcommittee comprised of one or more members of the Committee. The Committee shall also carry out such other duties that may be delegated to it by the Board of Directors from time to time.

Approved by the Governance Committee Date: January 25, 2007

Approved by the Board of DirectorsDate: March 22, 2007

Corporate Responsibility Committee Charter


The Corporate Responsibility Committee is a standing committee of the Board of Directors. The purpose of the Committee is to act in an advisory capacity to the Board of Directors and management with respect to policies and strategies that affect the Company’s role and its reputation as a socially responsible organization. As it is management’s responsibility to direct the Company’s role as a socially responsible organization, management retains authority for all communications with the public and investors relating to social policy issues.II. Organization


2. Members. The members of the Committee shall be appointed by the Board of Directors and shall consist solely of non-employee Directors, all of whom meet the independence requirements of the New York Stock Exchange and applicable policies of the Board of Directors. The Committee shall be comprised of at least three members. Committee members may be removed by the Board of Directors. The Board of Directors shall also designate a Committee Chairperson.

3. Meetings. The Committee shall establish a schedule of meetings each year. Additional meetings may be scheduled as required.

4. Agenda, Minutes and Reports. The Chairperson of the Committee shall be responsible for establishing the agendas for meetings of the Committee. An agenda, together with materials relating to the subject matter of each meeting, shall be sent to members of the Committee prior to each meeting. Minutes for all meetings of the Committee shall be prepared and circulated in draft form to all Committee members to ensure an accurate final record, and shall be approved at a subsequent meeting of the Committee. The minutes shall be distributed periodically to the full Board of Directors. The Committee shall make regular reports to the Board of Directors.


1. Areas of Oversight. The Committee may provide advice and counsel to the Company’s management in a wide range of areas, including:

Workplace safety matters Environmental responsibility Employee opportunities and training Nutrition and well-being initiatives Product safety Sustainable supply chain initiatives Diversity initiatives Stakeholder engagement Government relations, including advocacy efforts undertaken by the Company on

public issues Philanthropy Programs

This list is not intended to be exhaustive; rather, the Committee should address

topical and other issues that may arise as the Company’s responsibilities as a socially responsible organization change over time.

Executive Committee Charter

The Executive Committee shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of McDonald's Corporation except as may be limited by law, the Company's By-Laws or by resolution of the Board of Directors. The Executive Committee may also authorize the seal of the Company to be affixed to all papers which may require it.

Charter approved by resolution of the Board of Directors on January 20, 2002Finance Committee Charter


The Finance Committee is a standing committee of the Board of Directors. The Committee shall have principal oversight responsibility with respect to certain of the Company’s material financial matters, including investments and acquisitions that are material to the Company’s business. The Finance Committee shall not have oversight responsibility with respect to the Company’s financial reporting, which is the responsibility of the Audit Committee of the Board of Directors.II. Organization


2. Members. The members of the Committee shall be appointed by the Board of Directors and shall consist solely of non-employee Directors, all of whom meet the independence requirements of the New York Stock Exchange and applicable policies of the Board of Directors. The Committee shall be comprised of at least three members, at least one of whom shall also be a member of the Audit Committee. Committee members may be removed by the Board of Directors. The Board of Directors shall also designate a Committee Chairperson.

3. Meetings. In order to discharge its responsibilities, the Committee shall each year establish a schedule of meetings. Additional meetings may be scheduled as required.


III. Responsibility

1. Financial Policies. The Committee shall annually review the Company’s policies with respect to financial risk assessment and financial risk management, including policies with respect to the use of derivatives.

2. Dividend Policy and Actions. The Committee shall annually review and approve the Company’s dividend policy and recommend dividend actions to the Board of Directors.

3. Share Repurchase. The Committee shall annually review the Company’s plans for share repurchase.

4. Banking and Trading ArrangementsBoard of Directors

Committee Membership

as of May 20, 2010

Audit Committee

Enrique Hernandez, Jr., ChairpersonWalter MasseyCary McMillanSheila PenroseRoger Stone

Executive Committee

James Skinner, Chairperson Robert Eckert Enrique Hernandez, Jr. Andrew McKenna

Compensation Committee

Robert Eckert, ChairpersonSusan ArnoldRichard LennyJohn Rogers, Jr.Miles White

Finance Committee

Jeanne Jackson, Chairperson Richard Lenny Cary McMillanJohn RogersRoger Stone

Corporate Responsibility Committee

Walter Massey, ChairpersonSusan ArnoldSheila PenroseJohn Rogers, Jr.

Governance Committee

Andrew McKenna, Chairperson Robert Eckert Enrique Hernandez, Jr. Jeanne Jackson Roger StoneMiles White

Policy for Pre-Approval of Audit and Non-Audit Services Provided by External Audit Firm

January 2010 Update

Purpose and Applicability of PolicyUnder the Sarbanes-Oxley Act of 2002, the Audit Committee of the Board of Directors is responsible for the appointment, compensation and oversight of the work performed by the independent auditor engaged by McDonald’s Corporation (the Company). As part of this responsibility, the Audit Committee is required to pre-approve all audit and non-audit services performed by the independent auditor to assure that they do not impair the auditor’s independence from the Company. Examples of these services are set out in Exhibit A. Accordingly, the Audit Committee has adopted the following policy that sets forth the procedures and conditions for pre-approving audit and permitted non-audit services to be performed by the independent auditor responsible for auditing the Company’s consolidated financial statements or any separate financial statements that will be filed with the SEC.The Audit Committee shall review this policy annually for purposes of assuring its continued appropriateness and compliance with applicable law and listing standards, including regulations of the SEC and the Public Company Accounting Oversight Board (PCAOB).

The SEC’s rules establish two different approaches to pre-approving services, both of which the SEC considers to be equally valid. Proposed services may either be pre-approved by the Audit Committee on a categorical basis, without consideration of specific services (“general pre-approval”), or may be subject to case-by-case pre-approval by the Audit Committee (“specific pre-approval”). The Audit Committee believes that the combination of these two approaches will result in an effective and efficient procedure for purposes of addressing the Company’s auditing and non-auditing services and when evaluating the potential impact

http://www.aboutmcdonalds.com/mcd/investors/corporate_governance/audit_committee_policy/exhibit_a.html

http://www.aboutmcdonalds.com/mcd/investors/corporate_governance/audit_committee_policy/exhibit_a.html

of non-audit services on the independence of the external auditor.

Regardless of whether a class of or individual service is proposed for general or specific pre-approval, the Audit Committee shall consider whether such service is consistent with applicable SEC and PCAOB rules and guidance with respect to auditor independence. The Audit Committee shall also consider whether the independent auditor is best positioned to provide the most effective and efficient service, for reasons such as familiarity with the Company’s business, people, culture, accounting systems, risk profile and other factors, and whether the service may enhance the Company’s ability to manage or control risk or improve audit quality. All such factors will be considered as a whole, and no one factor should necessarily be determinative.The Audit Committee shall also be mindful of the relationship between fees for audit and non-audit services in determining whether to pre-approve any class of or individual service and may determine, for each fiscal year, the appropriate ratio between the total amount of fees for “Audit”, “Audit-related” and “Tax” services and the total amount of fees for permissible non-audit services classified as “All Other” services.

Pre-Approval Requirement and DisclosureAll audit and permitted non-audit services to be provided by the independent auditor shall be pre-approved by the Audit Committee. Pre-approval fee levels for all services to be provided by the independent auditor shall generally be established annually by the Audit Committee, subject to the following limitations:

When considering whether to grant an approval, the Audit Committee should consider the nature, scope and fees of the service to be provided to the Company as well as the principles and guidance established by the SEC and PCAOB with respect to auditor independence, including the fact that an auditor cannot (i) function in the role of management; (ii) audit his or her own work; or (iii) serve in an advocacy role for the Company.

In general, classes of predictable and recurring audit and permitted non-audit services shall be considered for general pre-approval by the full Audit Committee on an annual basis at the beginning of each fiscal year.

Unless a class of or individual audit or non-audit service shall have received a general pre-approval, it will require specific pre-approval by the Audit Committee or its delegate. Also, any proposed service for which the estimated fees would cause the total fees for that class of service to exceed the applicable estimated fee threshold shall require specific approval by the Audit Committee or its delegate. In addition, specific pre-approval by the Audit Committee or its delegate is required before engaging Ernst & Young to perform any due diligence services or internal control review, regardless of the size of the fee.

Schedule 1 lists services that are expected to be the subject of general pre-approval on an annual basis and an indication of the historical amount of fees paid for each class of service, the time frame and process for approval, and the estimated pre-approval fee threshold.

Services as to which a general pre-approval shall have been granted on an annual basis shall be effective for the applicable fiscal year. Any specific pre-approval of an audit or permitted non-audit service may be provided up to one year prior to commencement of the service. In any case in which a service is to be provided over a period of years, the approval shall be reviewed for renewal on an annual basis.Delegation of Pre-ApprovalThe Audit Committee elects to delegate pre-approval authority to the Chairman of the Audit Committee to approve any one or more individual audit or permitted non-audit services for which estimated fees do not exceed $250,000 as well as adjustments to any estimated pre-approval fee thresholds up to $100,000 for any individual service. Any services that would exceed such limits should be pre-approved by the full Audit Committee. The Chairman shall report any pre-approval granted at the next scheduled meeting of the Audit Committee.

Prohibited ServicesThe Company may not under any circumstances engage the independent auditor to provide any service that is prohibited by applicable law. The Audit Committee should consult with General Counsel if any question arises as to whether a proposed audit or non-audit service is permissible under applicable law. The Audit Committee may determine to prohibit other services that in its view may compromise, or appear to compromise, the independence and objectivity of the independent auditor

Monitoring ProceduresThe Audit Committee has designated the Corporate Controller to monitor the performance of all services provided by the independent auditor and to determine whether such services are in compliance with this policy. The Corporate Controller shall report to the Audit Committee on a periodic basis with respect to compliance with the policy. The Corporate Controller shall promptly report to the Chairman of the Audit Committee any non-compliance (or attempted non-compliance) with this policy of which he or she becomes aware. On a periodic basis, the nature of actual services provided by the independent auditor as well as the associated fees shall be reported to the Audit Committee.

Additional RequirementsThe Audit Committee shall take additional measures on an annual basis as may be appropriate to meet its responsibility to oversee the work of the independent auditor and to assure the auditor’s independence. Such measures shall include the review of a written statement from the independent auditor describing all relationships between the independent auditor and the Company, consistent with PCAOB Rule 3526; a discussion with the independent auditor with respect to its methods and procedures for ensuring independence; and an annual review of the Company’s hiring policy for employees of the external audit firm.

De Minimis ExceptionApplicable law provides for an exception to the pre-approval requirements for permissible non-audit services provided that (1) all such services do not, in the aggregate, amount to more than 5 percent of the total fees paid by the Company to the independent auditor, (2) such services were not recognized as non-audit services at the time of the relevant engagement, and (3) such services were promptly brought to the attention of and approved by the Audit Committee (or its delegate) prior to the completion of the annual audit.

Disclosure of Pre-Approval Policies and ProceduresThe Company shall publicly disclose the Audit Committee’s pre-approval policies and procedures in its Proxy Statement.Financial Officer Code of Ethics

The following is the code of ethics the Chief Executive Officer and Senior Financial officers are expected to adhere to:

As the [specify office] of McDonald’s Corporation (the “Company”), I acknowledge that the Company is committed to honesty and ethical conduct in all areas of its business and that officers with responsibility for the conduct or supervision of the Company’s financial affairs play a special role in preserving and protecting shareholders' interests.

In furtherance of the above and to the best of my ability, I will adhere to the following principles and responsibilities:

Act at all times in accordance with the Company’s Standards of Business Conduct, a copy of which has been provided to me and with which I will comply;

Act at all times with integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships;

Address any apparent conflict of interest in personal and professional relationships in accordance with the highest ethical standards and promptly disclose to the General Counsel of the Company the nature of any such conflict of interest or any material transaction or relationship that reasonably could be expected to give rise to such a conflict of interest;

Provide, in the Company’s reports filed with the Securities and Exchange Commission and other public communications, disclosure that is full, fair, accurate, complete, objective, timely and understandable;

Comply with applicable rules and regulations of all U.S. and non-U.S. governmental entities and other private and public regulatory agencies, including any exchanges on which the Company’s securities may be listed;

Act in good faith, responsibly, with due care, competence and diligence, and without misrepresenting material facts or circumstances and without seeking improperly to influence or hinder the Company’s independent auditors in any way in the performance of their engagement;

Act objectively, without allowing my independent judgment to be subordinated; Maintain the confidentiality of Company information, except when authorized or otherwise required

to make any disclosure, and avoid the use of any Company information for personal advantage; Consistent with applicable law, share my knowledge with others within the Company to the extent

appropriate to improve communications to the Company's shareholders and other constituents; Keep abreast of emerging financial issues relevant to shareholders and other constituents; Promote ethical behavior among employees under my supervision; Accept accountability for adherence to this Code of Ethics and the Company’s Standards of

Business Conduct; andAchieve responsible use of and control over all assets and resources of the Company entrusted to me.

I acknowledge that the Company’s Standards of Business Conduct describe procedures for the internal reporting of violations of such Standards. I will comply with those reporting requirements. I will also promote compliance with them by others under my supervision, as well as prompt reporting by them of violations of such Standards. I further acknowledge that the consequences of my failure to adhere to this Code of Ethics or the Company’s Standards of Business Conduct may result in disciplinary action, up to and including termination. By ____________________________________Name:Title:Date:

Approved by the Audit Committee March 22, 2006

Ownership Guidelines

McDonald's and its shareholders are best served by running the business with a long-term perspective, while striving to deliver consistently good annual results. Stock ownership is an important tool to strengthen the alignment of interests of shareholders, Directors and Company executives. So to that end, McDonald's has established these stock ownership guidelines.

Director Stock Ownership Guidelines Executive Stock Ownership Guidelines

Stock Ownership Guidelines for Directors

The Board of Directors believes that Directors more effectively represent McDonald’s shareholders, whose interests they are charged with protecting, if they are shareholders themselves. The Board originally adopted guidelines as recommended minimums for stock ownership by Directors in 1997 and believes it is good practice to periodically review the guidelines and revise them, if appropriate.

Therefore, beginning in January, 2008, outside Directors should own McDonald’s Common Stock equal in value to the lesser of five times the annual cash Board retainer or ten thousand shares within five years of joining the Board (of which 1,000 shares should be owned within the first year of joining the Board). The minimum number of shares to be held by Directors will be calculated on the first trading day of each calendar year based on their fair market value. Any subsequent change in the value of the shares will not affect the amount of stock Directors should hold during that year. In the event the cash retainer increases, the Directors will have five years from the time of the increase to acquire any additional shares needed to meet these guidelines.

The following will be used in determining share ownership:1. Shares owned individually, either directly or indirectly;2. Shares owned jointly with, or separately by spouse, domestic partner and/or minor children, either

directly or indirectly; and3. Share equivalents held pursuant to the Directors' Deferred Compensation Plan.

Adopted by the Board of Directors on July 26, 2007Executive Stock Ownership Requirements

At McDonald’s, ownership of company stock by our McDonald’s Executives is very important. It shows the investing public, the financial press and the rest of our employees whom we lead that we believe in the company. That is why we have minimum stock ownership requirements for our executives.

We express our requirements as a multiple of salary. The Compensation Committee can modify these requirements in the event of dramatic and unexpected changes in the market value of McDonald’s shares. Our minimum stock ownership requirements by level are as follow:

Level/Band Minimum Ownership RequirementsMultiple of Base Salary

Vice Chairman & CEO 6XPresident & COO 5XPresident U.S./APMEA/Europe 4XExecutive Management (EVP) 4XSenior Leadership (SVP) – U.S.-paid 3XSenior Leadership (SVP) – non-U.S.-paid 2X

All newly-promoted executives who are subject to the above stock ownership requirements will have five years from the time they are promoted to reach the minimum ownership requirements for the level/band into which they are promoted.

In calculating share ownership, the following sources may be included: Shares purchased on the open market Shares held in individual brokerage accounts Shares owned jointly with, or separately, by spouse and/or children Shares held through the Profit Sharing and Savings Plan Shares held through the Excess Benefit and Deferred Bonus Plan

Shares held through the Supplemental Profit Sharing and Savings Plan Shares obtained through stock option exercise Net after tax proceeds (using a 34% tax rate) of unvested restricted stock units (RSUs). This

cannot represent more than 50% of the requirement total.

Failure to meet or, in unique circumstances, to show sustained progress toward meeting the above ownership requirements may result in a reduction in future long-term incentive equity grants, and/or payment of future annual and/or long-term cash incentive payouts in the form of stock.

Executives who are subject to the stock ownership requirements will be notified each year as to their status against the requirements. McDonald’s Global Compensation department will compile ownership totals for applicable executives from the sources listed above. Since McDonald’s does not have access to information about shares held in street name, in individual brokerage accounts, or owned by a spouse and/or child(ren), executives will be asked to provide that information.

Approved by the Compensation Committee, July 2008Standards of Business Conduct for Employees

McDonald's is committed to conducting business ethically and in compliance with the letter and spirit of the law. This commitment is reflected in McDonald's Values. Inherent in each value is our commitment to be ethical, truthful and dependable and this is reflected through our Standards of Business Conduct which serves as a guide to making good decisions and conducting business ethically.Each year McDonald's employees certify that they have read and will abide by our Standards of Business Conduct. Employees also complete regular training on the Standards and various laws, regulations and company-specific policies. The international versions of the Standards contain a supplement detailing McDonald's policy on the Foreign Corrupt Practices Act (FCPA). Employees in McDonald's international offices certify compliance with their local version of the Standardscontaining the FCPA supplement. In addition, McDonald's Global Compliance Office monitors and enforces the company's policies prohibiting money laundering, bribery and doing business with terrorist groups, as directed by the US Patriot Act, the FCPA and Executive Order 13224.

Political Contributions PolicyPhilosophy

Generally, the Company does not make contributions to political parties, candidates for public office or political organizations. However, because public policy issues have the potential to impact the Company’s business, its employees, franchisees and the communities in which McDonald’s restaurants operate, the Company’s management believes that in certain cases it may be appropriate and in the Company’s best interests to use its resources to make political contributions. Therefore, McDonald’s Corporation Board of Directors has adopted this Political Contributions Policy (the “Policy”) to ensure that such contributions are made in a manner consistent with the Company’s core values and to protect and/or enhance shareholder value.

While Company employees may participate as individual citizens in the political process, decisions to do so are entirely personal and voluntary. Employees engaging in political campaign activities are expected to do so as private citizens, and must at all times make clear that their views and actions are their own, and not those of the Company. Employees

must not use their position with the Company to coerce or pressure other employees to make contributions to or support or oppose any political candidates or elections.Definitions

For purposes of this Policy:

The “Company” includes McDonald’s Corporation and its majority-owned subsidiaries, except for those subsidiaries whose stock is publicly traded.

A “political contribution” is any gift, loan, advance or deposit of money or anything of value, made: (a) for the purpose of influencing any election for federal, country, state or local office or a ballot initiative; or (b) to pay debt incurred in connection with any such election or ballot initiative.Contribution Approval Guidelines

Any political contribution made by the Company must be approved in advance by the head of the Government Relations Department of McDonald’s Corporation, and must support a political candidate or ballot initiative that the head of the Government Relations Department determines is beneficial to the long-term interests of the Company and its system of restaurants. In determining whether or not to approve a request to make a political contribution, the head of the Government Relations Department may examine many factors, including, but not limited to, the merits of the candidate, election or ballot initiative, the value of the contribution to the election or ballot initiative, the quality and effectiveness of the organization to which the contribution will be made and the appropriateness of the Company’s level of involvement in the election or ballot initiative. When possible, the Company should avoid making political contributions through a conduit or intermediary organization.

All political contributions must also: (1) comply with all current applicable laws and regulations in the jurisdictions in which the contributions are made (including the Foreign Corrupt Practices Act); (2) adhere to this Policy and McDonald’s Standards of Business Conduct; and; (3) not be made to any organization in the United States required to report their contributions and expenditures to the IRS under 26 USC Sec. 527. However, even where applicable law would permit the Company to make a political contribution, the decision may be to deny the contribution request. In making any determination, the head of the Government Relations Department may consult with legal counsel, compliance personnel, and members of the Company’s management.

In addition to the approval of the head of the Government Relations Department, any request for political contributions to a single candidate, political party or ballot initiative that will aggregate to more than U.S. $100,000 in a calendar year shall require the approval of the McDonald’s area of the world president of the market in which the contribution will be made. Also, McDonald’s Board of Directors, by resolution, may establish an annual aggregate spending limit for the Company’s political contributions.

Oversight

Management will report semi-annually to the Audit Committee of the Board of Directors of McDonald’s Corporation regarding political contributions made by the Company pursuant to this Policy. Political contributions in excess of the spending limit established by the Board or any other exceptions to this Policy, must be approved in advance by the Audit Committee.

Disclosure

The Company shall at all times comply with all current applicable laws and regulations relating to the reporting requirements of corporate political contributions. In addition, on a semi-annual basis, McDonald’s Corporation will publish the corporate political contributions made in the United States pursuant to this Policy on its website at www.mcdonalds.com.Amendments to the Policy

Amendments to the Policy must be approved by the Board of Directors.

Approved by the Board of Directors onMarch 23, 2006

http://www.mcdonalds.com/

Corporate Governance of McDonalds

Documents

Transcript of Corporate Governance of McDonalds