Intel 2003 Annual Report Download - page 22

Table of Contents
Index to Financial Statements
Corporate Governance
Corporate governance is typically defined as the system that allocates duties and authority among a company’s stockholders, board of
directors and management. The stockholders elect the board and vote on extraordinary matters; the board is the company’s governing body,
responsible for hiring, overseeing and evaluating management, particularly the Chief Executive Officer (CEO); and management runs the
company’s day-to-day operations. The Board believes that there should be a substantial majority of independent directors on the Board. The
Board also believes that it is useful and appropriate to have members of management, including the Chief Executive Officer, as directors.
The Board’s general policy, based on experience, is that the positions of Chairman of the Board and Chief Executive Officer should be
held by separate persons as an aid in the Board’
s oversight of management. In addition, the Board has an independent director designated as the
Lead Independent Director, who is responsible for coordinating the activities of the other independent directors and performs various other
duties. The general authority and responsibilities of the Lead Independent Director are established in a written charter adopted by the Board.
The current Board members include ten independent directors and three members of Intel’s senior management. The Board members
include Craig R. Barrett, Intel’s Chief Executive Officer; Ambassador Charlene Barshefsky, Senior International Partner at the Wilmer, Cutler
& Pickering law firm; E. John P. Browne, Group Chief Executive of BP plc; Winston H. Chen, Chairman of Paramitas Foundation; Andrew S.
Grove, Intel’s Chairman of the Board; D. James Guzy, Chairman of Arbor Company; Reed E. Hundt, Advisor to McKinsey and Company and
Venture Partner of Benchmark Capital; Paul S. Otellini, Intel’s President and Chief Operating Officer; David S. Pottruck, President and Chief
Executive Officer of The Charles Schwab Corporation; Jane E. Shaw, Chairman and Chief Executive Officer of Aerogen, Inc.; John L.
Thornton, Professor and Director of Global Leadership at Tsinghua University, Beijing, China; David B. Yoffie, Professor of International
Business Administration, Harvard Business School; and Charles E. Young, President Emeritus of the University of Florida and Chancellor
Emeritus of the University of California at Los Angeles. Messrs. Chen and Young are not standing for reelection at the next Annual
Stockholders’ Meeting. The Board also has two Directors Emeriti, Gordon E. Moore and Leslie L. Vadasz, who may participate in Board
meetings but do not vote.
“Independent” Directors. Each of the company’s directors other than Messrs. Grove, Barrett and Otellini qualify as “independent” in
accordance with the published listing requirements of The NASDAQ Stock Market (NASDAQ)*. The NASDAQ independence definition
includes a series of objective tests, such as that the director is not an employee of the company and has not engaged in various types of business
dealings with the company. In addition, as further required by the NASDAQ rules, the Board of Directors has made a subjective determination
as to each independent director that no relationships exist which, in the opinion of the Board, would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. In making these determinations, the directors reviewed and discussed information
provided by the directors and the company with regard to each director’s business and personal activities as they may relate to Intel and Intel’s
management.
In addition, the members of the Audit Committee of the Board also each qualify as “independent” under special standards established by
the Securities and Exchange Commission (SEC) for members of audit committees, and the Audit Committee includes at least one member who
is determined by the Board to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules, including that the
person meets the relevant definition of an “independent”
director. E. John P. Browne is the independent director who has been determined to be
an audit committee financial expert. Stockholders should understand that this designation is a disclosure requirement of the SEC related to Mr.
Browne’s experience and understanding with respect to certain accounting and auditing matters. The designation does not impose on Mr.
Browne any duties, obligations or liability that are greater than are generally imposed on him as a member of the Audit Committee and Board
of Directors, and his designation as an audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations
or liability of any other member of the Audit Committee or Board of Directors.
Board Responsibilities and Structure . The primary responsibilities of the Board of Directors are oversight, counseling and direction to
Intel’s management in the long-term interests of Intel and its stockholders. The Board’
s detailed responsibilities include: (a) selecting, regularly
evaluating the performance of, and approving the compensation of the Chief Executive Officer and other senior executives; (b) planning for
succession with respect to the position of Chief Executive Officer and monitoring management’s succession planning for other senior
executives; (c) reviewing and, where appropriate, approving Intel’s major financial objectives, strategic and operating plans and actions; (d)
overseeing the conduct of Intel’s business to evaluate whether the business is being properly managed; and (e) overseeing the processes for
maintaining Intel’s integrity with regard to its financial statements and other public disclosures and compliance with law and ethics. The Chief
Executive Officer, working with Intel’s other executive officers, has the authority and responsibility for managing Intel’s business in a manner
consistent with Intel’s standards and practices, and in
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