Fifth Annual Business Roundtable Corporate Governance Survey Finds Increased Independence and Company Oversight by Board of Directors

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WASHINGTON--Business Roundtable, an association of chief executive officers of 160 leading U.S. companies, today released its fifth annual survey of corporate governance practices among its members. The latest survey found an increase in the number of independent directors serving on corporate boards and a significant rise in the number of companies that have adopted majority voting for directors.

“The spotlight on governance reform in Corporate America is well placed and speaks to the accountability corporations share in creating long-term value for stakeholders,” said Anne M. Mulcahy, Chairman and CEO of Xerox Corporation and Chairman of Business Roundtable Corporate Governance Task Force. “The results from this CEO survey demonstrate the importance of governance in leading a successful company through independent boards, performance-based compensation, and smart business practices that align with the influential role Corporate America plays in our world today.”

This year’s survey included some new questions that focus on key issues of governance reform, including:

• Board Committees: 97% of Audit Committees, 92% of Compensation Committees and 68% of Nominating/Governance Committees meet in executive session each year. Audit Committees meet in executive session the most, with 85% meeting in executive session at every meeting.

• CEOs Serving on Other Boards: 75% of CEOs serve on no more than one other public company board. Nearly half (48%) of CEOs serve on only one other public company board while 27% of CEOs do not serve on any other public company boards.

• Shareholder Communications: Consistent with evolving practices and greater dialogue between boards and shareholders, 38% of companies responded that board members have met with shareholders in the last year.

• Sarbanes-Oxley: Spending on compliance with Sarbanes-Oxley appears to continue to decline. About 50% of companies expect costs to decrease moderately in light of the SEC’s interpretive guidance and the PCAOB’s Auditing Standard No.5; 31% expect costs to remain about the same, and only 2% expect an increase.

The survey results highlight shifts from previous years on these views from CEOs:

• Board Independence: 90% of companies report that their boards were at least 80% independent in 2007. In 2006, 87% of companies reported board independence of 80% or more.

• Majority Voting: The percentage of companies that have adopted majority voting procedures for directors has leapt from low levels to 82% in just two years.

• Executive Session: In 2007, 71% of respondents expect their non-management (or independent) directors to meet in executive session at every board meeting, up slightly from last year and representing a 26 point jump from four years ago.

• Pay-for-performance: 40% of companies reported adjusting the pay-for-performance element of senior executive compensation in the past year, in addition to the 57% that reported doing so in 2006. These figures demonstrate that boards support, in principle and practice, pay for performance and are making adjustments accordingly.

The Roundtable is committed to promoting the highest standards of accountability and ethical behavior. The organization has and continues to support the Sarbanes-Oxley Act and has supported the efforts of the SEC to implement the law.

In 2003, the Roundtable called for linking CEO pay with performance and promoting a greater role for independent compensation committees in determining executive compensation. Results from this most recent survey demonstrate significant progress in this area.

Earlier this year the Roundtable became a signing member of The Aspen Principles, a group of business organizations, institutional investors and labor unions committed to encouraging and implementing best corporate governance practices and long-term management and value creation strategies.

The Business Roundtable Institute for Corporate Ethics, housed at the Darden Graduate School of Business Administration at the University of Virginia, (www.darden.virginia.edu/corporate-ethics) launched in 2004 and continues to conduct research, create cutting-edge business ethics curricula, lead executive seminars on business ethics and develop best practices in corporate and business ethics.

Business Roundtable (www.businessroundtable.org) is an association of chief executive officers of leading U.S. companies with $4.5 trillion in annual revenues and more than 10 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets and represent over 40 percent of all corporate income taxes paid. Collectively, they returned $112 billion in dividends to shareholders and the economy in 2005.

Roundtable companies give more than $7 billion a year in combined charitable contributions, representing nearly 60 percent of total corporate giving. They are technology innovation leaders, with $90 billion in annual research and development spending – nearly half of the total private R&D spending in the U.S.

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