GE 2006 Annual Report Download - page 42

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Governance
The primary role of GE’s Board of Directors is to oversee how
management serves the interests of shareowners and other
stakeholders. To do this, GE’s directors have adopted corporate
governance principles aimed at ensuring that the Board is
independent and fully informed of the key risks and strategic
issues facing GE. GE has met its goal to have two-thirds of its
Board be independent under a strict definition of independence.
Today, 12 of GE’s 16 directors are independent.
The GE Board held 10 meetings in 2006, and each outside Board
member visited at least two GE businesses in 2006, without the
involvement of corporate management, in order to develop their
own feel for the Company. The Board focuses on the areas that
are important to shareowners — strategy, risk management and
people — and, in 2006, received briefings on a variety of issues
including: controllership and risk management, global strategy,
potential acquisitions and dispositions, operating leverage, growth
opportunities, key businesses, competitive strategy, compliance
trends and the impact of macroeconomic trends on the Company.
At the end of the year, the Board and each of its committees
conducted a thorough self-evaluation as part of its normal
governance cycle.
The Audit Committee, composed entirely of independent
directors, held 15 meetings in 2006 to oversee our fi nancial
reporting activities, the activities and independence of GE’s external
auditors, and the organization and activities of GE’s internal audit
staff. It also reviewed our progress in meeting the internal control
requirements of Section 404 of the Sarbanes-Oxley Act of 2002
and compliance with key GE policies and applicable laws.
The Management Development and Compensation Committee
(MDCC), comprised entirely of independent directors, held eight
meetings to approve executive compensation actions for our
executive officers and to review executive compensation plans,
policies and practices, changes in executive assignments and
responsibilities, and key succession plans. The Nominating and
Corporate Governance Committee, comprised entirely of indepen-
dent directors, met three times to consider GE’s governance charter
and practices and director nominations. The Public Responsibilities
Committee, in four meetings, reviewed GE’s 2006 Citizenship
Report, Environmental, Health and Safety operations, GE’s public
policy agenda and the GE Foundation budget.
Finally, we want to thank Bill Conaty for his 40 years of
loyal and valuable service to the Company. As head of Human
Resources, Bill led by example and helped develop a generation
of GE leaders.
40 ge 2006 annual report