At Raytheon, we maintain a keen focus on good corporate governance. We believe good governance requires unwavering independent board oversight, accountability and transparency, as well as open and proactive communication with all constituencies. While this fundamental philosophy does not change, good governance itself is not static - we continually adapt and evolve our governance practices in the context of our changing business environment.

Maintaining a contemporary governance platform

Raytheon’s contemporary governance platform is illustrated by the following key features, which have been adopted over the last several years. Further details on our governance practices are available in our Proxy Statement and on our website at www.raytheon.com/investorrelations/governance.

• Nine out of 10 of our directors are independent under NYSE standards;
• All key board committees consist entirely of independent directors;
• A strong, independent lead director complements the role of our board chairman and CEO;
• Strict limits are placed on the number of boards on which directors can serve;
• We have annual elections and majority voting for directors;
• In advance of regulatory requirements, we have instituted a clawback policy and a prohibition on hedging for officers and directors;
• We provide clear and understandable proxy disclosure on governance and executive compensation; and
• Shareholder access is enhanced through shareholder rights to call special meetings and our shareholder outreach program.

Ensuring proactive dialogue with shareholders and other constituencies

To ensure proactive dialogue with our constituencies, we regularly engage with them on a number of fronts, including through traditional and social media, regulatory filings, and personal contact. We communicate with shareholders and other interested parties about our business and performance, governance, executive compensation and other matters of constituency interest on a global and local basis.

We seek productive and open exchanges of views and evaluate input received to ensure that we maintain best governance practices. Communications with the company may be made through www.raytheon.com/contact.

Focusing on risk management in a challenging business environment

In the current challenging business environment, we believe a consistent focus on risk management and oversight is crucial to maintaining and enhancing shareholder value. We employ a rigorous, process-driven enterprise wide risk management program to identify, assess and prioritize risks across the company. Top risks and associated mitigation plans are actively followed by senior management and reported periodically to the board. We also manage risk through numerous controls and business processes embedded in operations, which we periodically report to the board and its committees.

Meeting the challenges of a changing business landscape through good governance

With a focus on our growing international business, we maintain a leading edge in governance and compliance through innovative and effective programs to ensure that all our activities are conducted with integrity, in full compliance with laws and regulations, and with respect for the cultures of our business partners.

Ethics and compliance education is the cornerstone of our programs. We have enhanced our anti-corruption curriculum, tailoring the content of our online and face-to-face training to our employees’ specific jobs and functions, based on realistic scenarios. We communicated “FCPAware” video vignettes to employees to heighten awareness of international compliance issues, which in total were viewed 54,000 times.

We have brought new focus to key international policies, including policies on due diligence for international suppliers, business travel and entertainment, and offset arrangements. We have launched an internal controls self-assessment process, which includes use of quarterly anti-corruption certifications. We also have formed an Anti-Corruption Sustainment Working Group to communicate, educate, monitor and assess the effectiveness of our policies, processes and internal controls to prevent and detect potential violations of anti-corruption laws.