ADT 2010 Annual Report Download - page 34

Board Responsibilities
The Board is responsible for:
• reviewing and approving management’s strategic and business plans;
• reviewing and approving financial plans, objectives and actions, including significant capital
allocations and expenditures;
• monitoring management’s execution of corporate plans and objectives;
• advising management on significant decisions and reviewing and approving major transactions;
• identifying and recommending Director candidates for election by shareholders;
• appraising the Company’s major risks and overseeing that appropriate risk management and
control procedures are in place;
• selecting, monitoring, evaluating, compensating and, if necessary, replacing the Chief Executive
Officer and other senior executives, and seeing that organizational development and succession
plans are maintained for these executive positions;
• determining the Chief Executive Officer’s compensation, and approving the compensation of
senior officers;
• overseeing that procedures are in place designed to promote compliance with laws and
regulations;
• overseeing that procedures are in place designed to promote integrity and candor in the audit of
the Company’s financial statements and operations, and in all financial reporting and disclosure;
• designing and assessing the effectiveness of its own governance practices and procedures as well
as Board and committee performance; and
• periodically monitoring and reviewing shareholder communication.
Board Leadership
The business of the Company is managed under the direction of the Company’s Board, in the
interest of the shareholders. The Board delegates its authority to senior management for managing the
everyday affairs of the Company. The Board requires that senior management review major actions and
initiatives with the Board prior to implementation.
The Board believes that it is currently in the best interest of the Company for the positions of
Chairman and Chief Executive Officer to be combined and held by the same person, Mr. Breen.
Having Mr. Breen act as both Chairman and Chief Executive benefits the Company in significant ways,
in particular by facilitating efficient and effective board deliberations. Mr. Breen is in a unique position
to blend the perspective of both the board and management and ensure that the appropriate matters
are presented to the Board. Mr. Breen’s long tenure with the Company and his deep knowledge of the
Company’s day-to-day operations and the principal issues and risks facing the Company enable him to
focus the Board’s deliberations on those matters that are most critical to the Company. Further, by
combining the roles, the Board believes the Company presents its message and strategy to shareholders,
employees, customers and other stakeholders with a unified voice, a benefit that is particularly
important to a company that is as diverse and multifaceted as Tyco. This has also benefited the
Company as it has undertaken significant initiatives to restructure its global operations, including
through its portfolio refinement actions and the implementation of significant cost reduction programs.
26 2011 Proxy Statement