ADT 2007 Annual Report Download - page 33

are in the best interests of the Company. It is only in unusual circumstances that the Board decides
that the retired Chief Executive Officer should continue to serve.
Director Orientation and Education
A formal orientation program is provided to new Directors by the Corporate Secretary on Tyco’s
mission, values, governance, compliance and business operations. In addition, a program of continuing
education is annually provided to incumbent Directors, and it includes review of the Company’s Guide
to Ethical Conduct. Directors are also encouraged to take advantage of outside continuing education
relating to their duties as a Director and to subscribe to appropriate publications at the Company’s
expense.
Other Directorships and Conflicts
In order to provide sufficient time for informed participation in their board responsibilities:
• non-executive Directors who are employed as chief executive officer of a publicly traded
company are required to limit their external directorships of other public companies to two;
• non-executive Directors who are otherwise fully employed are required to limit their external
directorships of other public companies to three; and
• non-executive Directors who are not fully employed are required to limit their external
directorships of other public companies to five.
The Board may, in its discretion, waive these limits in special circumstances. When a Director, the
chief executive or other senior managers intend to serve on another board, the Nominating and
Governance Committee is required to be notified. The Committee reviews the possibility of conflicts of
interest or time constraints and must approve the officer’s or Director’s appointment to the outside
board. Each Director is required to notify the chair of the Nominating and Governance Committee of
any conflicts. The chief executive may serve on no more than two other public company boards.
The company has a formal, written procedure intended to ensure compliance with the related
party provisions in our guide to ethical conduct, Bye-laws and with our corporate governance principles.
For the purpose of the policy, a ‘‘related party transaction’’ is a transaction in which we participate and
in which any related party has a direct or indirect material interest, other than ordinary course,
arms-length transactions of less than 1% of the revenue of the counterparty. Transactions exceeding the
1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services
that could impair a Director’s independence, must be approved by our Nominating and Corporate
Governance Committee. Any related party transaction in which an executive officer or a Director has a
personal interest, or which could present a possible conflict under the guide to ethical conduct, must be
approved by a majority of disinterested directors, following appropriate disclosure of all material
aspects of the transaction.
Guide to Ethical Conduct
We have adopted the Tyco Guide to Ethical Conduct, which applies to all employees, officers, and
Directors of Tyco. The Guide to Ethical Conduct meets the requirements of a ‘‘code of ethics’’ as
defined by Item 406 of Regulation S-K and applies to our Chief Executive Officer, Chief Financial
Officer and Chief Accounting Officer, as well as all other employees. The Guide to Ethical Conduct
also meets the requirements of a code of business, conduct and ethics under the listing standards of the
New York Stock Exchange (‘‘NYSE’’). The Guide to Ethical Conduct is posted on our website at
www.tyco.com under the heading ‘‘Corporate Responsibility—Governance’’. We will also provide a copy
of the Guide to Ethical Conduct to shareholders upon request. We disclose any amendments to the
2008 Proxy Statement 13