The functions of the Audit Committee include assisting the Board in overseeing:

• the integrity of our financial statements and our systems of internal accounting and financial controls;
• the independence, qualifications and performance of our independent auditor;

• the performance of our internal auditors;
• the cybersecurity program as part of the risk oversight function; and
• our compliance with legal and regulatory requirements.

The Committee also has sole authority to appoint, compensate and terminate the independent auditor, and pre-approves all auditing services and permitted non-audit services that the audit firm may perform for the Company. The Committee is also responsible for negotiating the audit fees. In order to ensure continuing auditor independence, the Committee periodically considers whether there should be a rotation of the independent audit firm. In conjunction with the mandated rotation of the audit firm’s lead engagement partner, the Committee and its Chair are directly involved in the selection of the audit firm’s new lead engagement partner. Among its other responsibilities, the Committee meets regularly in separate Executive Sessions with our independent auditor and senior leaders of Eaton Corporation, including the Vice Chairman and Chief Financial and Planning Officer, Executive Vice President and General Counsel, Senior Vice President-Internal Audit, and Senior Vice President-Global Ethics and Compliance; approves the Committee’s report to be included in our annual proxy statement; assures that performance evaluations of the Audit Committee are conducted annually; and establishes procedures for the proper handling of complaints concerning accounting or auditing matters.

Each Committee member meets the independence requirements, and all Committee members collectively meet the other requirements, of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the Securities and Exchange Commission. In addition, Committee members are prohibited from serving on more than two other public company audit committees. The Board of Directors has determined that each member of the Audit Committee is financially literate, that Messrs. Leonetti and Smith and Mses. Pianalto and Thompson each qualify as an audit committee financial expert (as defined in Securities and Exchange Commission rules) and that all members of the Audit Committee have accounting or related financial management expertise.

The functions of the Compensation and Organization Committee include:

• reviewing proposed organization or responsibility changes at the senior officer level;
• evaluating the performance of the Company’s Chairman and Eaton Corporation’s Chief Executive Officer with input from all non-employee directors;
• reviewing the performance evaluations of the other senior officers;
• reviewing succession planning;
• reviewing our practices for recruiting and developing a diverse talent pool;
• determining the annual salaries and short- and long-term incentive opportunities for our senior officers;
• establishing performance objectives under our short- and long-term incentive compensation plans and assessing performance against these objectives;

• annually determining the aggregate amount of awards to be made under our short-term incentive compensation plans and adjusting those amounts as it deems appropriate within the terms of those plans;
• annually determining the individual awards to be made to our senior officers under our short- and long-term incentive compensation plans;
• overseeing our stock plans;
• reviewing compensation practices as they relate to key employees to confirm that those plans remain equitable and competitive;
• reviewing significant new employee benefit plans or significant changes in such plans or changes with a disproportionate effect on our officers or primarily benefiting key employees; and
• issuing an annual report for our proxy statement regarding executive compensation.

Additional information on the Committee’s processes and procedures is contained in the Compensation Discussion and Analysis portion of this proxy statement beginning on page 32.

The functions of the Executive Committee include:

• acting on matters requiring Board action during the intervals between Board meetings; and

• carrying out any function of the Board except for filling Board or Committee vacancies.

Mr. Arnold serves as Committee Chair. The Lead Director and the chairs of each Board Committee serve as members of the Executive Committee. The Committee did not meet in 2019.

The functions of the Finance Committee include:

• the periodic review of our financial condition and the recommendation of financial policies to the Board;
• analyzing Company policy regarding its debt-to-equity relationship;
• reviewing and making recommendations to the Board regarding our dividend policy;
• reviewing our cash flow, proposals for long- and short-term debt financing and the financial risk management program;

• meeting with and reviewing the performance of the management pension committees and any other fiduciaries appointed by the Board for pension and profit-sharing retirement plans; and
• reviewing the key assumptions used to calculate annual pension expense.

The responsibilities of the Governance Committee include:

• recommending to the Board improvements in our corporate governance processes and any changes in the Board Governance Policies;
• advising the Board on changes in the size and composition of the Board;
• annually submitting to the Board candidates for members and chairs of each standing Board committee;
• in consultation with the Chief Executive Officer of Eaton Corporation, identifying and recommending to the Board candidates for Board membership;

• reviewing and recommending to the Board the nomination of directors for re-election;
• overseeing the orientation of new directors and the ongoing education of the Board;
• recommending to the Board compensation of non-employee directors;
• administering the Board’s policy on director retirements and resignations; and
• establishing guidelines and procedures to be used by the directors to evaluate the Board’s performance.

Other responsibilities include providing oversight on significant public policy issues with respect to our relationships with shareholders, employees, customers, competitors, suppliers and the communities in which we operate, including such areas as ethics, compliance, environmental, health and safety issues, community relations, government relations, charitable contributions and shareholder relations.