Agilent CEO Discusses Diligence in Boardroom By Ned Barnholt, Chairman, President and CEO, Agilent "On My Mind" is a column by Agilent Chairman, President and CEO Ned Barnholt, featured at news@agilent.com, which focuses on a range of issues facing business today. For the past year and a half, the role of the board of directors has been analyzed, dissected and discussed more than any other topic related to corporate governance. As a result of the financial scandals that continue to rock the business world, many questions have been raised concerning just how far the responsibilities of a corporate director extend. How can a board maintain enough independence to ensure that decisions are made in the best interest of shareholders and employees, and not just for a few senior executives? From its beginning in 1999, Agilent's goal was to be a well-managed company, positioned for success in the long run. Corporate governance was, and remains, an important element of this strategy. As a result, when Sarbanes-Oxley was enacted, and many other companies had to react quickly, Agilent's board and corporate guidelines were well within the bounds of compliance. It is my strong belief that a board must maintain its independence from management and represent the views of shareholders. As a result, our other directors are from outside Agilent and represent a wide range of disciplines and areas of expertise. We have intentionally kept our board small, nine directors in all, which encourages debate and discussion. Since I serve as chairman, we have appointed a lead director who chairs executive sessions with the independent directors at every meeting. These sessions allow board members to freely discuss issues without Agilent management in attendance. There are a number of different theories as to how involved directors should be in the running of their companies. At Agilent we have an active board --- our directors are not afraid to ask questions and challenge management. Their complementary skill sets help them evaluate the company's operating results and long-term strategies on a regular basis. And the use of an annual self-evaluation questionnaire helps ensure that we remain focused on the appropriate priorities. Both the compensation and audit and finance committees hold executive sessions on a regular basis; the former engages its own consultant, while the latter works with Agilent's audit director and outside auditors to ensure an unbiased oversight of critical issues related to the company's financial condition, business controls and financial disclosures. There is, unfortunately, no way to guarantee a quick end to all corporate abuse. New SEC regulations and stricter reporting requirements are a start. I continue to believe, however, that ethics cannot be regulated. No amount of rule making or policies will substitute for visible ethical leadership by all senior management. Within each company, it is management's responsibility to set the right tone so that only the highest of ethical standards will prevail, and to make sure that systems and processes are in place to support this. With a diligent board of directors, and its inherent system of checks and balances, we can go a long way toward creating a healthy and prosperous business environment for the long term.