ADT 2008 Annual Report Download - page 26

chairing an executive session of the independent Directors at each formal Board meeting. The lead
director is expected to foster a cohesive board that cooperates with the CEO towards the ultimate goal
of creating shareholder value.
Board Capabilities
The Tyco Board as a whole is strong in its diversity and collective knowledge of accounting and
finance, management and leadership, vision and strategy, business operations, business judgment, crisis
management, risk assessment, industry knowledge, corporate governance and global markets.
The culture of the Board is such that the Board can operate swiftly and effectively in making key
decisions and facing major challenges. Board meetings are conducted in an environment of trust, open
dialogue and mutual respect that encourages constructive commentary.
The Board strives to be informed, proactive and vigilant in its oversight of the Company and
protection of shareholder assets.
Board Committees
To conduct its business the Board maintains three standing committees: Audit, Compensation and
Human Resources (the ‘‘Compensation Committee’’), and Nominating and Governance, and they are
each entirely composed of independent Directors. Assignments to, and chairs of, the Audit and
Compensation Committees are recommended by the Nominating and Governance Committee and
selected by the Board. The independent Directors as a group elect the members and the chair of the
Nominating and Governance committee. All committees report on their activities to the Board.
The lead Director may convene ‘‘special committees’’ to review material matters being considered
by the Board. Special committees report their activities to the Board.
To ensure effective discussion and decision making while at the same time having a sufficient
number of independent Directors for its three committees, the Board is normally constituted of
between ten and thirteen Directors. Shareholders have the authority to set the number of Directors at
the annual general meeting, and the Directors have the authority to fill any vacancy that may arise
during the year.
The Nominating and Governance Committee reviews the Board’s governance guidelines annually
and recommends appropriate changes to the Board.
Board Meetings
The Board meets at least five times annually, and additional meetings may be called in accordance
with the Company’s Bye-laws. Frequent board meetings are critical not only for timely decisions but
also for Directors to be well informed about the Company’s operations and issues. One of these
meetings will be scheduled in conjunction with the Company’s annual general meeting and board
members are required to be in attendance at the annual general meeting either in person or by
telephone. The lead Director, in consultation with the Chairman of the Board / Chief Executive
Officer, is responsible for setting meeting agendas with input from the Directors.
Committee meetings are normally held in conjunction with Board meetings. Major committee
decisions are reviewed and approved by the Board. The Board chair and committee chairs are
responsible for conducting meetings and informal consultations in a fashion that encourages informed,
meaningful and probing deliberations. Presentations at Board meetings are concise and focused, and
they include adequate time for discussion and decision-making. An executive session of independent
Directors, chaired by the lead Director, is held at each formal meeting of the Board.
2009 Proxy Statement 9