Independence and Accountability
Raytheon believes that maintaining contemporary governance practices is a continuing process. In recent years, the Board has adopted a number of best practices to enhance accountability to shareholders. Recent improvements in governance include the elimination of both Raytheon’s “poison pill” barrier to hostile takeover and the segmentation of the Board into classes of directors elected to staggered terms. Currently, Raytheon has no “poison pill” and the entire Board is elected annually. In addition, in 2006, we implemented a new by-law providing for majority voting in uncontested elections. Under this by-law, the shareholder votes cast “for” an uncontested Board nominee must exceed the votes cast “against,” or the director must submit his or her resignation to the Board. These and other improvements, including robust stock ownership guidelines for directors and executive officers, have established Raytheon as a leader in contemporary governance practices. In recognition of our efforts, Raytheon has received increasingly high scores from leading corporate governance groups, including a recent governance performance rating of outperforming 87.1 percent of companies in the S&P 500 and 98 percent of the companies in our industry grouping.

Transparency
We have also enhanced our transparency procedures in response to the passage of the Sarbanes-Oxley Act of 2002 to ensure that information required to be disclosed is appropriately documented, processed, summarized and reported in a timely manner. Raytheon’s Disclosure Committee assists senior management in helping to ensure that company disclosures are accurate and complete and fairly report Raytheon’s financial condition and results of operations in all material respects.

Stewardship
Among the Board’s committees, the Public Affairs Committee plays the leading role on corporate stewardship issues. The Committee monitors compliance and, when appropriate, recommends new policies to the full Board in the following areas: environmental protection, health and safety, ethics, regulatory compliance, charitable contributions and community relations, government relations, crisis management and emergency preparedness. Additionally, the Committee identifies and brings to the attention of the Board current and emerging public policy trends and issues affecting Raytheon and our various constituencies.

Raytheon constantly strives to ensure contemporary, balanced and transparent corporate governance, and thereby sets the stage for exemplary corporate stewardship.