Baker Hughes 2007 Annual Report Download - page 24

6 Baker Hughes Incorporated
Audit/Ethics Committee. The Audit/Ethics Committee
held nine meetings during fiscal year 2007. The Board of
Directors has determined that each of the Audit/Ethics
Committee members meet the NYSE standards for indepen-
dence as well as those contained in the Company’s “Policy for
Director Independence, Audit/Ethics Committee Members and
Audit Committee Financial Expert.” The Audit/Ethics Commit-
tee Charter is attached as Annex B to this Proxy Statement
and can be accessed electronically under the “About Baker
Hughes” section of the Company’s website at www.baker-
hughes.com. The General Auditor and the Corporate internal
audit function report directly to the Audit/Ethics Committee.
The Company’s Corporate Audit Department sends written
reports quarterly to the Audit/Ethics Committee on its audit
findings and the status of its internal audit projects. The Audit/
Ethics Committee provides assistance to the Board of Directors
in overseeing matters relating to the accounting and reporting
practices of the Company, the adequacy of the Company’s dis-
closure controls and internal controls, the quality and integrity
of the quarterly and annual financial statements of the Com-
pany, the performance of the Company’s internal audit func-
tion, the review and pre-approval of the current year audit and
non-audit fees and the Company’s risk analysis and risk man-
agement procedures. In addition, the Audit/Ethics Committee
oversees the Company’s compliance programs relating to legal
and regulatory requirements. The Audit/Ethics Committee has
developed “Procedures for the Receipt, Retention and Treat-
ment of Complaints” to address complaints received by the
Company regarding accounting, internal controls or auditing
matters. Such procedures are included as Exhibit F to the Gov-
ernance Guidelines. The Governance Guidelines are posted
under the “About Baker Hughes” section of the Company’s
website at www.bakerhughes.com and are also available upon
request to the Company’s Corporate Secretary.
The Audit/Ethics Committee also is responsible for the
selection and hiring of the Company’s Independent Registered
Public Accounting Firm. To promote independence of the
audit, the Audit/Ethics Committee consults separately and
jointly with the Company’s Independent Registered Public
Accounting Firm, the internal auditors and management.
The Board has reviewed the experience of the members of
the Audit/Ethics Committee and has found that each member
of the Committee meets the qualifications to be an “audit com-
mittee financial expert” under the SEC rules issued pursuant to
SOX. The Board has designated Anthony G. Fernandes as the
member of the Committee who serves as the “audit committee
financial expert” of the Company’s Audit/Ethics Committee.
Compensation Committee. The Compensation Commit-
tee held four meetings during fiscal year 2007. The Board of
Directors has determined that the Compensation Committee
members meet the NYSE standards for independence as
well as those contained in the Company’s “Policy for Director
Independence, Audit/Ethics Committee Members and Audit
Committee Financial Expert.” The Compensation Committee
Charter can be accessed electronically under the “About
Baker Hughes” section of the Company’s website at www.
bakerhughes.com. The functions performed by the Compen-
sation Committee include reviewing and approving Baker
Hughes’ executive salary and bonus structure; reviewing Baker
Hughes’ stock option plans (and approving grants thereunder),
employee retirement income plans, the employee thrift plan
and the employee stock purchase plan; setting bonus goals;
approving salary and bonus awards to key executives; recom-
mending incentive compensation and stock award plans for
approval by stockholders; and reviewing management succes-
sion plans.
Governance Committee. The Governance Committee
held four meetings during fiscal year 2007. The Board of
Directors has determined that the Governance Committee
members meet the NYSE standards for independence as well
as those contained in the Company’s “Policy for Director
Independence, Audit/Ethics Committee Members and Audit
Committee Financial Expert.” A current copy of the Gover-
nance Committee Charter can be accessed electronically under
the “About Baker Hughes” section of the Company’s website
at www.bakerhughes.com. The functions performed by the
Governance Committee include overseeing the Company’s
corporate governance affairs, health, safety and environmental
compliance functions and monitoring compliance with the
Governance Guidelines. In addition, the Governance Commit-
tee nominates candidates for the Board of Directors, selects
candidates to fill vacancies on the Board, reviews the structure
and composition of the Board, considers the qualifications
required for continuing Board service and recommends direc-
tors’ compensation. The Governance Committee annually
reviews the Company’s Policy Statement on Shareholders’
Rights Plans and reports any recommendations to the Board
of Directors.
Committee Memberships 2007
Audit/Ethics Compensation Executive Finance Governance
James F. McCall (C) H. John Riley, Jr. (C) Chad C. Deaton (C) Anthony G. Fernandes (C) Clarence P. Cazalot, Jr. (C)
Larry D. Brady Edward P. Djerejian Clarence P. Cazalot, Jr. Larry D. Brady Edward P. Djerejian
Clarence P. Cazalot, Jr. Claire W. Gargalli H. John Riley, Jr. Claire W. Gargalli James F. McCall
Anthony G. Fernandes Pierre H. Jungels Charles L. Watson Pierre H. Jungels H. John Riley, Jr.
James A. Lash J. Larry Nichols James A. Lash Charles L. Watson
J. Larry Nichols Charles L. Watson