Governance The primary role of GE’s Board of Directors is to oversee how management serves the interests of shareowners and other stakeholders. To do this, GE’s directors have adopted corporate governance principles aimed at ensuring that the Board is independent and fully informed of the key risks and strategic issues facing GE. GE has met its goal to have two-thirds of its Board be independent under a strict definition of independence. Today, 12 of GE’s 16 directors are independent. The GE Board held 10 meetings in 2006, and each outside Board member visited at least two GE businesses in 2006, without the involvement of corporate management, in order to develop their own feel for the Company. The Board focuses on the areas that are important to shareowners — strategy, risk management and people — and, in 2006, received briefings on a variety of issues including: controllership and risk management, global strategy, potential acquisitions and dispositions, operating leverage, growth opportunities, key businesses, competitive strategy, compliance trends and the impact of macroeconomic trends on the Company. At the end of the year, the Board and each of its committees conducted a thorough self-evaluation as part of its normal governance cycle. The Audit Committee, composed entirely of independent directors, held 15 meetings in 2006 to oversee our fi nancial reporting activities, the activities and independence of GE’s external auditors, and the organization and activities of GE’s internal audit staff. It also reviewed our progress in meeting the internal control requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and compliance with key GE policies and applicable laws. The Management Development and Compensation Committee (MDCC), comprised entirely of independent directors, held eight meetings to approve executive compensation actions for our executive officers and to review executive compensation plans, policies and practices, changes in executive assignments and responsibilities, and key succession plans. The Nominating and Corporate Governance Committee, comprised entirely of indepen- dent directors, met three times to consider GE’s governance charter and practices and director nominations. The Public Responsibilities Committee, in four meetings, reviewed GE’s 2006 Citizenship Report, Environmental, Health and Safety operations, GE’s public policy agenda and the GE Foundation budget. Finally, we want to thank Bill Conaty for his 40 years of loyal and valuable service to the Company. As head of Human Resources, Bill led by example and helped develop a generation of GE leaders. 40 ge 2006 annual report