BRT updates its governance principles.

• Position: MODEL BEHAVIOR

Ed. Note: The Business Roundtable (BAT) released in June 2012 an updated set of principles for corporate governance that reflects "the new circumstances of Dodd-Frank Wall Street Reform and Consumer Protection Act implementation and the continuing evolution of best practices." BRT added that the "principles come at a critical time for the U.S. economy, as employment and economic growth remain well below their normal levels." On the release of the principles, Alexander Cutler, chairman and CEO of Eaton Corp. and chair of the BRT's Corporate Governance Committee, stated, "The way corporations are governed directly affects the wellbeing of workers, shareholder and consumers and the health of the overall economy. BRT's new Principles of Corporate Governance are a guide post for American corporations that are leading the way to more U.S. jobs, increased economic growth and greater shareholder value." Following is the BRT's overview of its updated principles, drawn from its 32-page report, Principles of Corporate Governance 2012.

Business Roundtable supports the following guiding principles:

First, the paramount duty of the board of directors of a public corporation is to select a chief executive officer and to oversee the CEO and senior management in the competent and ethical operation of the corporation on a day-to-day basis.

Second, it is the responsibility of management, under the oversight of the board, to operate the corporation in an effective and ethical manner to produce long-term value for shareholders. The board of directors, the CEO and senior management should set a "tone at the top" that establishes a culture of legal compliance and integrity. Directors and management should never put personal interests ahead of or in conflict with the interests of the corporation.

Third, it is the responsibility of management, under the oversight of the board, to develop and implement the corporation's strategic plans, and to identify, evaluate and manage the risks inherent in the corporation's strategy. The board of directors should understand the corporation's strategic plans, the associated risks, and the steps that management is taking to monitor and manage those risks. The board and senior management should agree on the appropriate risk profile for the corporation, and they should be comfortable that the strategic plans are consistent with that risk profile.

Fourth, it is the responsibility of management, under the oversight of the audit...