Baker Hughes 2004 Annual Report Download - page 47

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•฀ Review฀membership฀of฀Company’s฀“Disclosure฀Control฀and฀
Internal฀Control฀Committee”฀(“DCIC”),฀the฀DCIC’s฀sched-
uled฀activities฀and฀the฀DCIC’s฀quarterly฀report.฀Review฀on฀
an฀annual฀basis฀the฀DCIC฀Charter.
•฀ Receive฀reports฀from฀the฀CEO฀and฀CFO฀on฀all฀significant฀
deficiencies฀in฀the฀design฀or฀operation฀of฀certain฀internal฀
controls฀and฀any฀fraud,฀whether฀or฀not฀material,฀that฀
involves฀management฀or฀other฀employees฀who฀have฀a฀฀
significant฀role฀in฀the฀Company’s฀internal฀controls.
•฀ Review฀reports,฀media฀coverage฀and฀similar฀public฀informa-
tion฀provided฀to฀analysts฀and฀rating฀agencies,฀as฀the฀Com-
mittee฀deems฀appropriate.
•฀ Establish฀formal฀procedures฀for฀(i)฀the฀receipt,฀retention฀
and฀treatment฀of฀complaints฀received฀by฀the฀Company฀
regarding฀accounting,฀internal฀accounting฀controls฀or฀
auditing฀matters,฀(ii)฀the฀confidential,฀anonymous฀submis-
sions฀by฀Company฀employees฀of฀concerns฀regarding฀ques-
tionable฀accounting฀or฀auditing฀matters,฀and฀(iii)฀the฀
protection฀of฀reporting฀employees฀from฀retaliation.
•฀ The฀Committee฀shall฀annually฀review฀with฀the฀independent฀
auditors฀any฀audit฀problems฀or฀difficulties฀and฀manage-
ment’s฀response.฀The฀Committee฀must฀regularly฀review฀
with฀the฀independent฀auditor฀any฀difficulties฀the฀auditor฀
encountered฀in฀the฀course฀of฀the฀audit฀work,฀including฀any฀
restrictions฀on฀the฀scope฀of฀the฀independent฀auditors’฀activ-
ities฀or฀on฀access฀to฀requested฀information,฀and฀any฀signifi-
cant฀disagreements฀with฀management.฀Among฀the฀items฀
the฀Committee฀may฀want฀to฀review฀with฀the฀auditors฀are:฀
any฀accounting฀adjustments฀that฀were฀noted฀or฀proposed฀
by฀the฀auditor฀but฀were฀“passed”฀(as฀immaterial฀or฀other-
wise);฀any฀communications฀between฀the฀audit฀team฀and฀
the฀audit฀firm’s฀national฀office฀respecting฀auditing฀or฀
accounting฀issues฀presented฀by฀the฀engagement;฀and฀any฀
“management”฀or฀“internal฀control”฀letter฀issued,฀or฀pro-
posed฀to฀be฀issued,฀by฀the฀audit฀firm฀to฀the฀Company.
With฀regard฀to฀its฀compliance฀responsibilities,฀the฀฀
Committee฀shall:
•฀ Review฀the฀management’s฀recommendation฀of฀and฀moni-
toring฀of฀compliance฀with฀the฀Company’s฀Business฀Code฀
of฀Conduct฀and฀Foreign฀Corrupt฀Practices฀Act฀policy.
•฀ Review฀in฀conjunction฀with฀counsel฀(i)฀any฀legal฀matters฀
that฀could฀have฀significant฀impact฀on฀the฀organization’s฀
financial฀statements;฀(ii)฀correspondence฀and฀material฀inqui-
ries฀received฀from฀regulators฀or฀governmental฀agencies;฀
and฀(iii)฀all฀matters฀relating฀to฀the฀ethics฀of฀this฀Company฀
and฀its฀subsidiaries.
•฀ Coordinate฀the฀Company’s฀compliance฀with฀inquiries฀from฀
any฀government฀officials฀concerning฀legal฀compliance฀in฀
the฀areas฀covered฀by฀the฀Business฀Code฀of฀Conduct฀and฀
the฀Foreign฀Corrupt฀Practices฀Act฀policy.
•฀ Review฀the฀Company’s฀compliance฀with฀its฀environmental฀
policy฀on฀an฀annual฀basis.
•฀ Respond฀to฀such฀other฀duties฀as฀may฀be฀assigned฀to฀the฀
Committee,฀from฀time฀to฀time,฀by฀the฀Board฀of฀Directors.
While฀the฀Committee฀has฀the฀responsibilities฀and฀powers฀
set฀forth฀in฀this฀Charter,฀it฀is฀not฀the฀duty฀of฀the฀Committee฀
to฀plan฀or฀conduct฀audits฀or฀to฀determine฀that฀the฀Company’s฀
financial฀statements฀are฀complete฀and฀accurate฀and฀are฀in฀
accordance฀with฀generally฀accepted฀accounting฀principles;฀
these฀are฀the฀responsibilities฀of฀management฀and฀the฀indepen-
dent฀auditor.฀Nor฀is฀it฀the฀duty฀of฀the฀Committee฀to฀conduct฀
investigations,฀to฀resolve฀disagreements,฀if฀any,฀between฀man-
agement฀and฀the฀independent฀auditor฀or฀to฀assure฀compliance฀
with฀laws฀and฀regulations฀or฀with฀Company฀policies.
Meetings
The฀Committee฀will฀meet฀at฀least฀five฀times฀per฀year฀as฀
determined฀by฀the฀Board฀of฀Directors.฀Special฀meetings฀may฀
be฀called,฀as฀needed,฀by฀the฀Chairman฀of฀the฀Board฀of฀Direc-
tors฀or฀the฀Chairman฀of฀the฀Committee.฀The฀Committee฀may฀
create฀subcommittees฀who฀shall฀report฀to฀the฀Committee.฀In฀
addition,฀the฀Committee฀will฀make฀itself฀available฀to฀the฀inde-
pendent฀auditors฀and฀the฀internal฀auditors฀of฀the฀Company฀as฀
requested.฀All฀meetings฀of฀the฀Committee฀will฀be฀held฀pursu-
ant฀to฀the฀Bylaws฀of฀the฀Company฀with฀regard฀to฀notice฀and฀
waiver฀thereof,฀and฀written฀minutes฀of฀each฀meeting฀will฀be฀
duly฀filed฀in฀the฀Company฀records.฀Reports฀of฀meetings฀of฀the฀
Committee฀shall฀be฀made฀to฀the฀Board฀of฀Directors฀at฀its฀next฀
regularly฀scheduled฀meeting฀following฀the฀Committee฀meeting฀
accompanied฀by฀any฀recommendations฀to฀the฀Board฀of฀Direc-
tors฀approved฀by฀the฀Committee.
Proxy฀Statement฀฀฀฀฀B-3