ADT 2012 Annual Report Download - page 35

Board of Directors
The business of the Company is managed under the direction of its Board of Directors, in the interest of the
stockholders. The Board of Directors delegates its authority to management for managing the everyday affairs of
the Company. The Board of Directors requires that senior management review major actions and initiatives with
the Board prior to implementation.
Mission of the Board of Directors: What the Board Intends to Accomplish
The mission of ADT’s Board of Directors is to promote the long-term value and health of the Company in
the interests of the stockholders, its employees and its other stakeholders and set an ethical “tone at the top.” To
this end, the Board provides management with strategic guidance, and also ensures that management adopts and
implements procedures designed to promote both legal compliance and the highest standards of honesty, integrity
and ethics throughout the organization.
Governance Principles: How the Board Oversees the Company
1. Active Board: The directors are well informed about the Company and vigorous in their oversight of
management.
2. Company Leadership:The directors, together with management, set ADT’s strategic direction, review
financial objectives, and establish a high ethical tone for the management and leadership of the Company.
3. Compliance with Laws and Ethics:The directors ensure that procedures and practices are in place and
designed to prevent and identify illegal or unethical conduct and to permit appropriate and timely
redress should such conduct occur.
4. Inform and Listen to Investors and Regulators: The directors take steps to see that management
discloses appropriate information fairly, fully, timely, and accurately to investors and regulators, and
that the Company maintains a two-way communication channel with its investors and regulators.
5. Continuous Improvement:The directors remain abreast of new developments in corporate
governance, and they implement new procedures and practices as they deem appropriate.
Board Responsibilities
The Board of Directors 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 execution of corporate plans and objectives.
• Advising management on significant decisions and reviewing and approving major transactions.
• Recommending director candidates for election by stockholders.
• 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 management development and succession plans are
maintained for these executive positions.
• Determining the Chief Executive Officer’s compensation based on performance in meeting pre-
determined standards and objectives.
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