2007 Sustainability Report - Baxter Sustainability Report

Governance, Ethicsand ComplianceMore online:sustainability.baxter.com/governance_ethics_and_complianceBaxter’s culture is premised on making decisions with integrity,supported by structures and processes that facilitate acting incompliance with the law. Baxter is committed to strong corporategovernance, effective oversight of global operations, and earningstakeholders’ trust and respect by living the company’s values.Corporate GovernanceBaxter operates under the direction of its board of directors. Twelve independent directorsand Baxter’s chief executive officer (CEO) comprise the company’s board. Baxter’s CEOserves as chairman. The board also has an independent lead director, who presides atexecutive sessions of the board and serves as a liaison for the other independent directors.Baxter’s board has five committees: Audit, Compensation, Finance, Governance and PublicPolicy. The Public Policy Committee conducts an annual sustainability review across thespectrum of topics discussed in this report and reports on these activities to the full board.Baxter’s corporate governance guidelines set standards for the company’s board of directorsin areas such as fiduciary oversight, strategic planning, social responsibility, successionplanning and board elections. The guidelines also address the operation of the board andits committees, as well as director qualifications, independence and compensation.Case study Regional ethics and compliance counselabove (left to right) Celina Teh, basedin China, is the regional compliancecounsel for Asia Pacific; Lori Reber,based in Switzerland, is the regionalcompliance counsel for Europe; andMaria Leonor Rios, based in Brazil,is the regional compliance counsel forLatin America.During 2007, Baxter bolstered its international focus on ethics and compliance by embeddingregional compliance counsel in Asia Pacific, Europe and Latin America. These attorneyscounsel business teams on matters involving ethics and compliance, conduct complianceassessments to improve operating and control procedures, identify and lead educationalopportunities and share best practices across regions. In addition, these attorneys havere-energized the Regional Compliance Committees by positioning them to help prioritizeregional risks. The counsel also serve as sounding boards on the design and implementationof compliance programs and as ambassadors of Baxter’s ethics and compliance standardsand procedures.Please see the full report online for a discussion regarding regional compliance counsel roles andresponsibilities, and the issues and challenges they face.“Our stakeholders hold us to high standards. We take our compliance obligations seriously,and we have invested heavily to ensure that we have strong programs on a global basis.Our regional compliance counsel and committees provide a solid platform for proactive andreactive elements of our program.”– David H. Resnicoff, Associate General Counsel/Vice President, Ethics and Compliance6 BAXTER 2007 sustainability report | Governance, Ethics and compliance