Baker Hughes 2010 Annual Report Download - page 54

42 B a k e r H u g h e s I n c o r p o r a t e d
ANNEX A
BAKER HUGHES INCORPORATED
CORPORATE GOVERNANCE GUIDELINES
(As Amended February 24, 2011)
These Baker Hughes Incorporated Corporate Governance
Guidelines are established by the Board of Directors (“Board”)
as the principles for conduct of the Company’s business affairs
to benefit its stockholders.
Board
The responsibility of the members of the Board is to
exercise their business judgment to act in what they reason-
ably believe to be in the best interest of the Company and
its stockholders. In addition to the Board’s general oversight
of management’s performance of its responsibilities, the prin-
cipal functions of the Board acting directly or through its Com-
mittees (as defined in “Committees of the Board”) include:
• Providing effective oversight of the governance of the affairs
of the Company in order to maximize long-term benefit to
the stockholders
• Maintaining a viable succession plan for the office of the
Chief Executive Officer (“CEO”) of the Company and other
members of senior management
• Evaluating the performance of the Board and identifying
and recruiting new members for the Board
• Reviewing and approving long-term business plans
• Appointing, approving the compensation and overseeing
the work of the independent auditors
• Overseeing certain compliance related issues, including
accounting, internal audit, disclosure controls and
internal controls, enterprise risk management and
environmental policies
• Reviewing quarterly earnings release and quarterly and
annual financial statements to be filed with the Securities
and Exchange Commission (“SEC”)
• Evaluating and setting the compensation of the CEO and
other members of senior management
• Adopting an appropriate governance policy
Selection and Qualification of Directors – The Gover-
nance Committee will annually assess the needs of the Com-
pany and the Board in order to recommend to the Board the
director candidates who will further the goals of the Company
in representing the long-term interests of the stockholders. In
particular, the Governance Committee will assess the special
skills, expertise and backgrounds relevant to the Company’s
business to determine whether or not a candidate has the
character traits and breadth of business knowledge to make
him or her an effective director, based on previously estab-
lished criteria, as described in Exhibit A, “Guidelines for
Membership on the Board of Directors.” The Governance
Committee will annually assess the contributions of the
directors whose terms expire at the next Annual Meeting of
Stockholders and recommend to the Board if they should be
nominated for re-election by stockholders. The Board will pro-
pose a slate of nominees to the stockholders for election to
the Board at the next Annual Meeting, as described in Exhibit
B, “Selection Process for New Board of Directors Candidates .”
Independence – The Board will be comprised of a major-
ity of directors who qualify as independent directors under the
listing standards of the New York Stock Exchange (“NYSE”),
as described in Exhibit C, “Policy for Director Independence,
Audit/Ethics Committee Members and Audit Committee Finan-
cial Expert.” Annually, the Board will review the relationship
that each director has with the Company to determine that
the director has no material relationship with the Company,
its affiliates or any member of the senior management of the
Company, subject to additional qualifications prescribed under
the listing standards of the New York Stock Exchange. The
Company will not make any personal loans or extensions of
credit to directors or executive officers.
Size and Term of the Board – In accordance with the
Company’s Bylaws, the Board determines the number of direc-
tors on the Board, which currently will consist of not more
than 11 directors. In accordance with the Company’s Restated
Certificate of Incorporation, at each Annual Meeting of Stock-
holders, directors shall be elected for a term of one year
ending on the date of the Annual Meeting of Stockholders
following the annual meeting at which the directors were
elected and will serve until their successors are elected and
qualified or until his or her earlier death, retirement, resig-
nation or removal. Stockholders may propose nominees for
consideration by the Governance Committee, as described in
Exhibit D, “Policy and Submission Procedures for Stockholder
Recommended Director Candidates,” by submitting within
the prescribed time period the name and supporting infor-
mation to: Chairman, Governance Committee of the Board
of Directors, P.O. Box 4740, Houston, Texas 77210-4740 or
to the Corporate Secretary, c/o Baker Hughes Incorporated,
2929 Allen Parkway, Suite 2100, Houston, Texas 77019-2118
to be properly nominated before the next Annual Meeting of
Stockholders, although the Company is not required to include
such nominees in its proxy statement. Between such annual
meetings, the Board may elect directors to serve until the
next annual meeting.
Voting for Directors – Any nominee for director in an
uncontested election who receives a “withhold” vote repre-
senting a majority of the votes cast for his or her election
will be required to submit a letter of resignation to the Gover-
nance Committee of the Board of Directors. The Governance
Committee will consider all of the relevant facts and circum-
stances and recommend to the Board of Directors whether or
not the resignation should be accepted. For the purposes of
this Section, an “uncontested election” shall mean an election
in which the number of nominees as of the record date for
the meeting at which directors are to be elected does not
exceed the number of directors to be elected at such meeting.
Director Orientation and Continuing Education –
The Governance Committee will periodically review and rec-
ommend to the Board a director orientation program that
includes an initial and continuing orientations providing the
director with comprehensive information about the Company’s
business, one-on-one meetings with senior management and
other officers of the Company, an overview of the Director
Reference Manual and tours of the Company’s operations.
The directors will be provided with continuing education
materials covering upcoming seminars and conferences.