The advantages of a sound corporate governance system include a strong Board of Directors that is independent from management and accountable to the company and its shareholders. To maintain that independence:

• Eleven of our twelve Board members are independent, non-employee directors. Fluor's Chairman and Chief Executive Officer, Alan Boeckmann, is the only director who is an employee of the company.
• Independent Board members meet regularly (at least quarterly) without members of management present.
• Fluor's Lead Independent Director, Peter J. Fluor, presides over and sets the agenda for these "executive sessions" of the independent directors. The Lead Independent Director is appointed for a 3-year term by our independent directors.
• The Lead Independent Director also consults with the Chairman and Chief Executive Officer with respect to agendas, scheduling, and information needs relating to Board and committee meetings. He acts as a liaison between the independent directors and management and guides the director orientation process for new Board members.

Pursuant to our Corporate Governance Guidelines, the Governance Committee conducts a review of director independence in February of each year and makes an affirmative determination regarding the independence of its directors under the standards set forth in Section 9 of the Guidelines and NYSE listing standards. During this review, the Board considers transactions and relationships between the directors or any member of their immediate families and the company and its subsidiaries and affiliates. In making independence determinations, the Board considers each relationship not only from the standpoint of the director but also from the standpoint of persons and organizations with which the director has a relationship.