Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote a thriving economy and expanded opportunity for all Americans through sound public policy.
Principles of Corporate Governance
America's economy, workers and shareholders stand to benefit when U.S. public companies carry out the highest standards of governance. Business Roundtable promotes the best, modern governance practices that uphold the highest ethical standards and expand economic opportunity across the United States. These practices are detailed in the Roundtable flagship publication, Principles of Corporate Governance.
No one approach to corporate governance can serve all companies. Accordingly, the Principles are a guide to help each company develop the structures, practices and processes that are appropriate in light of its needs and circumstances.
Principles in the Spotlight
Guiding Principles
Business Roundtable supports the following guiding principles of corporate governance:
The Board
The Board oversees the CEO and senior management in operating the company's business and sets the "tone at the top" for ethical conduct.
Senior Management
Senior management develops and implements corporate strategy and operates the company's business under the board's oversight, with the goal of producing sustainable long-term value.
Effective Disclosures
Effective disclosures are the responsibility of management, under the oversight of the board and its audit committee. Financial statements must fairly present the company's financial condition and results of operations and make the timely disclosures investors need to assess the financial and business soundness and risks of the company.
The Audit Committee
The Audit Committee manages the relationship with the outside auditor, oversees the company's annual financial statement audit and internal control environment as well as the company's risk management and compliance programs.
Nominating / Corporate Governance Committee
The Nominating / Corporate Governance Committee plays a leadership role in shaping the corporate governance of the company, strives to build an engaged and diverse board whose composition is appropriate in light of the company's needs and actively conducts succession planning for the board.
Compensation Committee
The Compensation Committee develops an executive compensation philosophy, adopts and oversees the implementation of compensation policies that fit within its philosophy, designs compensation packages for the CEO and senior management to incentivize long-term value creation, as well as develops meaningful goals for performance-based compensation that support the company’s long-term value creation strategy.
Shareholder Engagement
Shareholder engagement on issues and concerns that are of widespread interest to shareholders and that impact the company's long-term value creation is appropriate for management and the board.
Long-Term Interests
Long-term interests should be the driving factor in board deliberations and may take account the interests of the company's constituencies, including stakeholders such as employees, customers, suppliers and the community in which the company does business — when doing so contributes in a direct and meaningful way to building long-term value creation.
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